Cambridge Industrial Trust

Cambridge Industrial Trust: CIMB initiates at Outperform with TP $0.75. Says the FY12 div yield of 7.4% makes it the highest yielding industrial S-REIT in its coverage. Believes the stock no longer deserves a discounted valuation. Asset and capital mgt improvements have been underway since 2009, incl optimization studies on assets to identify opportunities for enhancements and divestments to streamline the IPO portfolio. Thinks that Cambridge can take advantage of opportunities coming up in FY13/14 with the expiry of >40% of IPO leases. Believes this will allow for, i) 5-10% positive reversions, and ii) devt works on assets with underutilized plot ratios. For AEI, mgt guides for 10-15% IRR and the house estimates >350k sf gfa could be added in FY13/14. $13.6m of capital gains and ex-gratia payments will buffer lost income in the meantime.