Cambridge Industrial Trust

Cambridge Industrial Trust: DMG maintains Buy with $0.66 TP. Note that as previously announced on 2nd and 24th May 2012, Cambridge Industrial Trust (CIT) has joined with other owners of Lam Soon Industrial Building to undertake an ‘en-bloc’ sale of the entire property at an indicative pricing of S$330m (equivalent to an estimated S$950 psf) – 2.5x the valuation of the property on books. Located in Hillview, Upper Bukit Timah, Lam Soon Industrial is a 230,915 sq ft freehold site zoned for residential use with a gross plot ratio of 1.92x. With regards to this matter, CIT has just announced that despite good interests on the property, a mutually agreeable pricing could not be reached and hence the en-bloc sale would not be carried out. Although this is a freehold piece of land, the indicative price may be on the high side after taking the development cost into consideration. Although CIT could have greatly benefitted from this sale, believe CIT would continue to grow via other acquisitions and AEIs going forward while the management awaits a better time before carrying out another en-bloc sale.