Cambridge Industrial Trust

Cambridge Industrial Trust: SCB has O/p Call with TP: $0.81. House note that the REIT's 63 Hillview Avenue was sold for SGD 141mn, 28% above its book value and at a 2.3% NPI yield. The divestment will be completed by end-September and house expects CREIT to utilise the proceeds to fund acquisitions or redevelopment projects at c.7% NPI yield. Apart from that, CREIT also has the highest DPU growth among SREITs, of 28% in 2013-15E. CREIT is currently trading at 1.0x P/NAV and 21% discount to RNAV of $0.85/unit with several catalysts: (1) House expect EPU to normalise in 3Q13 after CREIT‟s 1H13 performance fee had resulted in a 2Q13 EPU of S¢0.01; (2) CREIT does not have its trust manager as its largest unitholder, and unitholders could vote for a change in the management fee structure or the internalisation of the manager. This could potentially be 3-5% accretive to the EPU.