CIT- Date of release of CIT's 1st Quarter Financial results

Cambridge Industrial Trust Management Limited, the Manager of Cambridge Industrial Trust (“CIT”), is pleased to announce that CIT’s unaudited financial results for the first quarter ended 31 March 2011, will be released on Thursday, 28 April 2011 after market close.
Chris

CIT rights issue timeline

18 March 2011 at 5.00 p.m.:Rights Issue Books Closure

23 March 2011: Despatch of Offer Information Statement (together with the
application forms) to Eligible Unitholders

23 March 2011 from 9.00 a.m: Commencement of trading of Rights Entitlements

31 March 2011 at 5.00 p.m: Close of trading of Rights Entitlements

6 April 2011 at 5.00 p.m: Last date and time for acceptance of the Rights Entitlements
and payment for Rights Units

15 April 2011 by 9.00 a.m: Expected date for crediting of the Rights Units
Commencement of trading of the Rights Units on the SGX‐ST

Cambridge Ind Trust - 4th Q Results

Highlights

• Gross revenue increase by 1% YOY (+4.8% QOQ) to 19.1mil

• Net profit income increase by 0.7% YOY (+11.2% QOQ) to 16.8mil

• Distribution income increase by 0.6% YOY (+0.5% QOQ) to 12 mil

• DPU decrease by 13.4% YOY (+0.5% QOQ) to 1.193 cents.

• Annualised DPU decrease by 13.4% YOY to 4.733 cents

• Gearing reduced to 34.7% from 42.6%

• CITM has announced a distribution of November to 31 December 2010. XD on 18 Feb and payable on 24th Mar.

More info on land acquisition of CIT properties

Source from DMG:
Based on the company’s initial assessment, three of CIT’s 43 properties will be affected to varying degrees by this land acquisition: (i) 1 Tuas Ave 3 – likely to be wholly acquired, but management feels minimal impact as CIT has two years to work with tenant to look for an alternative site or possibly develop a facility for CWT, so loss of NPI may not materialise at all. (ii) 30 Tuas Road – only entrance expected to be impacted, likely truncated (iii) 120 Pioneer Road – least impact, grass patch in front of building. As management will be meeting up with the authorities in the next two weeks, management should have more details by release of its 4Q10 results on 11 Feb. Maintain BUY, with TP of S$0.61.

My comments:
As according to the above info provided, the largest effect on CIT's rental income is on 1 Tuas Ave 3 which is about SG$2.6Mil in year 2009. The impact seems not great but will need more information to confirm on the overall effect.

NOTICE OF COMPULSORY LAND ACQUISITION AFFECTING 3 OF CIT’S 43 PROPERTIES

Cambridge Industrial Trust Management Limited, the Manager of Cambridge Industrial
Trust (“CIT”) (“the Company”) wishes to announce that it has received a formal notice
from Singapore Land Authority (“SLA”) on 11 January 2011 with regard to the compulsory
acquisition of land on Tuas Road, Pioneer Road, Tuas West Road, Tuas West Drive and
Tuas South Avenue 3 for the construction of Tuas West Mass Rapid Transit (“MRT”)
extension and road works along the Pan Island Expressway, Tuas Road, Pioneer Road, Tuas West Road, Tuas West Drive and Tuas South Avenue 3.

Based on the Company’s initial assessment, three of CIT’s 43 properties will be affected to varying degrees by this land acquisition:
1) 30 Tuas Road (Lot No 1289X pt Mukim 7)
2) 120 Pioneer Road (Lot No 3237M pt Mukim 7); and
3) 1 Tuas Avenue 3 (Lot 1422X Mukim 7)
All or part of the land where these properties are situated will be possessed by the Government by January 2013.
The relevant authorities will be arranging for their representatives to discuss the details of
the compulsory land acquisition with the Company, including details of compensation.
The Company will continue to assess the situation and will issue further announcements when it has more information.

My comments:
Base on the gross rental income in FY 2009, the land acquisition of these 3 properties will reduce CIT's revenue by approximately 5.5 mil (or 1.375 mil per quarter).
This will in turn reduce the DPU per quarter starting in year 2013. As for how much reduction in DPU and compensation amount given by SLA, more information needs to be provided.
Questions that I have:
(1) Amout of DPU reduction
(2) Are the 3 properties fully paid up? I suppose not since CIT gearing is pretty high.
(3) How much is SLA compensating
(4) What is CIT's plan on using the compensation. To pay off debts or more acquisition in line.

Cambridge Industrial Trust- 4th Quarter Financial results release date

Cambridge Industrial Trust Management Limited, the Manager of Cambridge Industrial
Trust (“CIT”), is pleased to announce that CIT’s unaudited financial results for the fourth
quarter and full year ended 31 December 2010, will be released on Thursday, 10
February 2011 after market close.

Cambridge Ind Trust- COMPLETION OF THE ACQUISITION OF 511 AND 513 YISHUN INDUSTRIAL PARK A USE OF PROCEEDS FROM THE PRIVATE PLACEMENT AND PREFERENTIAL

1.1 Cambridge Industrial Trust Management Limited, as manager of Cambridge Industrial Trust (“CIT” and the manager of CIT, the “Manager”), is pleased to announce the completion of the acquisition of the property located at 511 and 513 Yishun Industrial Park A, Singapore 768768 and 768736 respectively (“511 & 513 Yishun Industrial Park A”).

1.2 RBC Dexia Trust Services Singapore Limited, in its capacity as trustee of CIT (the “Trustee”), has today completed the acquisition of 511 & 513 Yishun Industrial Park A from Seksun International Pte. Ltd. pursuant to a put and call option agreement dated 20 October 2010 entered into between the Trustee and Seksun international Pte. Ltd.

511 Yishun Industrial Park A is a 5-storey light industrial building with ancillary workers’ dormitory, clean room facilities and surface carpark lots. 513 Yishun Industrial Park A is a 4-storey industrial building with mezzanine level. These two buildings are connected by a bridge via the second floor of each building. The properties are easily accessible via the Seletar Expressway. Both properties will be leased back to Seksun International pte. Ltd. for five (5) years from legal completion of sale.

2. USE OF PROCEEDS
2.1 Further to the announcements dated 21 October 2010, 1 November 2010, 2 November 2010, 16 November 2010 and 18 November 2010 in relation to the private placement and preferential offering concluded in November 2010 (the “Equity Fund Raising”), the Manager wishes to announce that S$21.8 million of the net proceeds from the Equity Fund Raising has been utilised for the purposes set out in the table below:

	Amount
	S$ million	%
Net proceeds from the Equity Fund Raising *	47.5	100
Less:
Part payment of the purchase price for 511 & 513 Yishun Industrial Park A and estimated acquisition costs	-21.8	-45.9
Balance of net proceeds remaining from the Equity Fund Raising	25.7	54.1

*Net of estimated fees and expenses (including underwriting fees) of approximately S$2.9 million.
Such use of proceeds is in accordance with the stated use in the announcements dated 21 October 2010 and 2 November 2010 in relation to the Equity Fund Raising.

CIT preferential shares

Cambridge Industrial Trust is offering 38,483,354 new units on a basis of 1 preferential share for every 25 existing units at an issue price of $0.531. It is a discount of ~3.5% from the closing price of $0.55 today. The last day to take up this offer is 10th Nov and i intend to take up the offer of 2400 shares and subscribe an excess of 2600 shares so as to make up to 5 lots.
If i do get all 5 lots, my average cost will increase to $0.507 per share.

Cambridge-DBSV

Attractive 9% yield

• S$50.4m cash call to fund property purchases

• Improved financial metrics, slight accretion to DPU

• 300 bps spread above Sreit sector average yield of 6.0% is attractive, Upgrade to BUY, TP revised to S$0.58

S$50.4m cash call to fund growth opportunities. Cambridge REIT (“CIT”) announced an equity fund raising (“EFR”) of S$50.4m via (i) private placement of 56.5m units (fully subscribed) and a preferential offering of up to 38.5m units, at S$0.531 per unit (fixed at 4.9% VWAP to price on 19 Oct).

Target yields of properties to be >8.0%. Proceeds will be used to fund the purchase of 4 properties of which 1 is a development project – CIT’s first undertaking. Post EFR, CIT will have stronger financial metrics (gearing of 36.4% after scheduled loan repayment in Nov’10), and reduced concentration of lease expiry in FY13-14 to 56.9%.

Enhancement plans unveiled, to boost DPU. CIT also unveiled AEI plans for 2 of its properties at a cost of S$13.1m, where incremental NPI yield is expected to be in excess of 15%. With the share placement and AEI works, we raised our forward FY11 DPU estimates to 2%.

3Q10 DPU of 1.18 Scts in line. Lower 3Q10 revenue and net property income (“NPI”) of S$18.2m (-2.6% yoy) and S$15.9m (-2.6% yoy) respectively were due to ongoing divestment program. Performance in 4Q10 should be lifted by contribution from its new acquisitions completed in recent weeks.

TP revised to S$0.58, Upgrade to BUY. We see relative value in Cambridge REIT given its high FY11-12 yield of 8.9-9.2%, which is a 300 bps above the average Sreit peers. Income visibility and stability is strong, given that most of its properties are sale-and-leaseback properties. Upgrade to BUY and raised TP to S$0.58.

Cambridge Industrial Trust to launch equity fund raising for $50.4m

Cambridge Industrial Trust says it will launch an equity fund raising comprising of the private placement of 56.5 million new units to raise gross proceeds of $30 million; and a preferential offering of up to 38.5 million new units to raise gross proceeds of up to $20.4 million The new units to be offered at a price of $0.531 for the private placement and $0.531 for the preferential offering. Retail offering to be made on the basis of each unitholder having a preferential offer of one preferential unit for every 25 existing units in CIT held by entitled unitholders as at 5.00 p.m. on 29 October 2010. Cambridge Industrial Trust says the net proceeds will be used to part‐finance two announced properties (25 Tai Seng ave and 511, 513 Yishun Industrial Park A) and two potential acquisitions in the western part of Singapore, with aggregate cost of $74.3 million. Post‐completion of the equity fund raising, CIT’s gearing level is estimated to fall from 39.2% to 38.6%, strengthening CIT’s capital structure.

CIT 3rdQ 2010 Financial results

3Q Highlights
• Successfully acquired new assets worth S$37.1 million, supported by a S$40.0 million Private Placement in August 2010.

• Reduced gearing from 42.3% to 39.2%, following loan prepayment of S$32.0 million. Further repayment is planned.

• Improved financial flexibility with a new three-year Acquisition Term Loan and Revolving Credit Facility totalling S$70.0 million.

• Delivered distributable income in 3Q2010 of S$10.8 million, which translated to a distribution per unit (“DPU”) of 1.187 cents.

• Successfully completed an asset enhancement

Overview of 3Q2010 Financial Results

	3Q2010 (S$m)	2Q2010 (S$m)	Q-o-Q Incr /(Decr)%	3Q2009 (S$m)	Y-o-Y Incr / (Decr) %
Gross Revenue	18.2	18.3	-0.5	18.7	-2.6
Net Property Income	15.9	16.1	-0.9	16.4	2.6
Distributable Income	10.8	10.8	(-)	11.2	-3.6
DPU (cents)	1.187	1.238	-4.1	1.344	-11.7
Annualised DPU (cents)	4.709	4.966	-5.2	5.332	-11.7

Property Portfolio
The carrying value of the property portfolio increased by S$7.3 million during the quarter to S$838.5 million as at 30 September 2010, mainly as a result of the acquisition of 22 Chin Bee Drive, less divestments during the period.

The Trust’s underlying property fundamentals have remained resilient, with 3Q2010 portfolio occupancy maintained at almost 100%, a weighted average lease expiry of 4.1 years and continued low arrears trending at around 0.7% of annualised rent. The 3Q2010 occupancy rate for CIT of 99.97%, remains higher than the national average of 92.3%1.

In line with the Manager’s strategy of implementing value-adding asset enhancement initiatives (“AEI”) for the Trust, a S$1.6 million AEI at 1 Third Lok Yang Road/4 Fourth Lok Yang Road for the tenant, YCH DistriPark, was completed in July 2010.

This resulted in a NPI yield of 20.0%. There are three other AEIs in the pipeline which are expected to yield between 10%-16%. A number of leases have also been re-structured to facilitate these AEIs, which, in turn enable the Manager to maximise the properties’ plot ratios, and enhance capital values.

Distribution Reinvestment Plan
Given that a cash distribution of 0.68 cents per unit for the period 1 July 2010 to 22 August 2010 was paid to Unitholders in September 2010, the Manager has determined that the DRP will not apply to the remainder of 3Q2010.

Outlook
Singapore’s economy expanded by 17.9% on an annualised basis in the first half of 2010.
The Ministry of Trade and Industry has maintained the GDP growth forecast at 13.0% to 15.0% for 20102. This improvement in macro economic conditions has positively impacted the industrial real estate sector, evidenced by recent URA’s statistics. Property prices and rentals for multiple-user factory space increased by 5.7% and 1.3% respectively in 2Q20103.
”While recent economic data has illustrated the pace of growth has slowed from 1H2010, the Manager remains optimistic that the industrial real estate market will steadily improve in 2H2010 based on the existing sectors demand and supply fundamentals,” said Mr. Calvert.

Event	Important Dates
Distribution Period	1 July 2010 to 30 September 2010
Distribution Rate
1 July 2010 to 22 August 2010	0.680 cents per unit (paid on 16 Sept 2010)
23 August 2010 to 30 Sept 2010	0.507 cents per unit
Last Day of Trading on “Cum” Basis	Monday, 25 October 2010
Ex-date	Tuesday, 26 October 2010
Books Closure Date	Thursday, 28 October 2010
Distribution Payment Date (1)	Tuesday, 30 November 201

DATE OF RELEASE OF CIT’S UNAUDITED FINANCIAL RESULTS FOR THE THIRD QUARTER ENDED 30 SEPTEMBER 2010

Cambridge Industrial Trust Management Limited, the Manager of Cambridge Industrial Trust (“CIT”), is pleased to announce that CIT’s unaudited financial results for the third quarter ended 30 September 2010, will be released on Tuesday, 19 October 2010 after market close.

Cambridge – DBSV

Tapping cash pool for new purchases

• Acquisition of Scorpio East Building for S$21.1m at initial 8% yield

• Positive acquisition with slight 2% accretion to DPU in FY11F, and terming out WALE.

• Rolling forward our numbers to FY11, TP is raised to S$0.54. Maintain HOLD.

Acquiring up to S$60m worth of properties to date. Cambridge REIT (“CIT”) announced the acquisition of Scorpio East Building, a recently completed light industrial building located in Paya Labar iPark, for S$21.1m (2% discount to valuation of S$21.5m). With this latest purchase, CIT will have acquired close to S$60m worth of properties to date. The Initial yield of the property is estimated to be c8.0% (based on Scorpio East’s annual rental of S$1.7-S$1.9m), which is in line with CIT current implied yield of 7.9%. The property will be leased back to the vendor for 5 years. The manager intends to fund the purchase through a combination of debt/equity.

Slight accretion to DPU and terming out the weighted average lease expiry (“WALE”) The manager has remained proactive in re-positioning its portfolio, replacing recent asset divestments with new asset purchases. Including this acquisition in our numbers, our FY11 DPU is raised by c2%. In addition, CIT will see its tenant expiry profile terming out further, reducing the concentration of expiry in FY13-14.

HOLD call maintained, TP adjusted to S$0.54. With our revised DPU estimates and rolling forward our numbers into FY11, our target price is raised to S$0.54. Maintain HOLD in view of limited upside. CIT currently offers FY10-11F yields of 9.1%.

Cambridge – Phillip

Acquires 2 properties

• Acquires 2 properties for $37.1 million.

• Private placement to raise gross proceeds of $40.0 million

• Maintain hold and fair value of $0.52

Acquisition

Cambridge announced the acquisition of 2 properties at a consideration of $37.1 million. The purchase is at a slight discount to the appraised value of $37.2 million. The property located at 22 Chin Bee Drive has a lease term of 7 years and the initial yield is 9.0%, and there is a rent escalation component of 5% on the 3rd, 5th and 7th year. The property located at 1&2 Changi North St 2 has a lease term of 7 years with an option to renew of another 7 years and the initial yield is 8.01% with annual rent escalation of 1.5%. The total acquisition cost is approximately $37.7 million and will be partly funded with $24.7 million from the private placement proceeds and the remaining $13 million through debt.

Private placement

The private placement consists of 83,683,000 new units which will be placed out to two groups of investor. The first group consists of institutional and other investors and the new units are priced at an issue price $0.478. The second group consists of the Oxley Group and Mitsui & Co Ltd and the new units are prices at $0.503. The private placement is fully underwritten and will raise gross proceeds of $40.0 million and net proceeds of $37.6 million. Part of the net proceeds is used to fund the acquisition while the remaining proceeds will be used for future acquisitions.

Gearing

Gearing is expected to reduce from 42.3% to 41.5% post the acquisition. The REIT will also be repaying $32 million of the existing loan from the divestment proceeds and gearing is expected to further reduce to 39.5%. In relation to the acquisition, Cambridge has secured a $50 million term loan facility and a $20 million revolving credit facility on a 3 year tenor. The term loan facility has an all-in 3.05% interest cost and $13 million will be drawn down to part finance the acquisition.

Advance distribution

Due to the issuance of new units, Cambridge will pay out advance distribution to existing unitholders prior to the issuance of the new units. Management guided the advance payout to be between 0.6 to 0.7 cents. We estimate this to be 0.674 cents and 3Q10 DPU inclusive of the advance distribution to be 1.169 cents.

Cambridge – DBSV

Earnings dilutive acquisitions

• Acquisition of 2 assets worth S$37.1m; part-funded by placement of 83.6m new units

• Lowered earnings by 2-6% in FY10-11F

• Downgrade to HOLD, TP S$0.51.

Looking towards growth. Cambridge REIT acquired 2 industrial properties for S$37.7m, yielding c8.0%. Income from these properties is backed by long-term leases of over 7 years with periodic step-ups. The acquisition is expected to complete in Sept 2010.

Private placement 83.6m new units to raise S$40m gross proceeds; new 3-year debt facility secured. The acquisition will be funded through (i) S$23.7m from private placement proceeds, (ii) S$13m drawn down from its debt facility at estimated c3.05% cost. The remaining placement proceeds of cS$15m will be used for future acquisitions or fund its planned asset enhancement initiatives. Gearing post acquisition is expected to head down to 41.5% from 42.3% as of 30th Jun 2010.

Dilutive to earnings, DPU adjusted downwards by 2-6%. Expect earnings dilution since placement price implies a yield of 10% against the asset yield of c8%. Our DPU estimates are adjusted downwards to 5.0 – 4.8 Scts in FY10-11F, reflecting the transaction.

Downgrade to HOLD, TP adjusted to S$0.51. We are somewhat surprised at management’s decision to acquire assets that are earnings dilutive. We remain on look out for future initiatives (AEI plans) that would grow earnings to offset the dilution. Given limited upside to our TP of S$0.51, we downgrade the stock to HOLD.

Cambridge Industrial cut to Outperform by CLSA

CLSA downgrades Cambridge Industrial Trust (J91U.SG) to Outperform from Buy on reduced upside to its $0.54 target price, says Dow Jones.

CLSA trims FY10-12 DPU estimates by 2%-3% to reflect dilution due to enlarged unit base following recent private placement to help fund S$37.1 million acquisition of 2 industrial properties in Singapore.

Research house notes CIT plans to retire $32 million of debt this month, bringing gearing to 39.5% from 41.5%; “our key concern is further equity dilutive acquisitions.” REIT off 1.0% at $0.505.