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half yearly report on tuesday the 26th

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    All eyes turn to property trust big guns as profit results loom.

    February 25, 2008

    INVESTORS are bracing for a flurry of good and not-so-good news this week when the big guns of the listed property trusts sector reveal half-year results.

    In what is considered one of the biggest and most controversial weeks of reports, the trusts will update the market on their debt exposure and the possible impact of the global credit crisis.

    Westfield, Lend Lease, GPT and Valad Property, as well as the debt-crippled Centro Properties and Centro Retail Trust, will try to reassure security holders.

    Centro's new chief executive, Glenn Rufrano, will be the main man this week when he faces the market on Thursday to appease angry investors who have had $5 billion wiped off the market value since late December.

    UBS says the key themes for analysts in the results are detailed debt exposure and earnings guidance and composition, as well as "sustainability, development capital expenditure feasibility and mergers and acquisition potential".

    The average annual earnings growth for the sector is forecast to be about 7%, but this season the pressure will be on trusts as they work through the global credit squeeze and the market's antipathy to US and British exposure.

    News on how the Japanese property market is faring will begin the week when Galileo Japan Trust reports, but analysts are not expecting any shocks.

    All eyes will be on Valad when directors update the market on Tuesday about its new deal with US-based real estate investment trust Kimco.

    UBS says the alliance, in the long term, is expected to allow both companies to leverage distribution networks for marketing new funds. Its half-year net income is forecast to be about $107 million, up from $49 million.

    Macquarie Leisure, owner of the Dreamworld theme park and d'Albora marinas, also reports earlier in the week. Mid-week the big guns come in the form of GPT and Westfield, both of which are full-year results. Focus will squarely centre on how they are faring with higher interest rates here and the impact of the US subprime crisis.

    To end the big week will be Centro. Goldman Sachs said the market took little comfort from the group's refinancing extensions, not to mention the $1.5 billion in debt last week that was "reclassified". The securities closed at 42¢ last week.
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