Cambridge Industrial Trust

Cambridge Industrial Trust: 2Q results largely in line.
Net property income at $16.9%, +4.9% yoy, +2% qoq, driven by higher gross revenue following the acq of 5 properties in Sep ’10 and Jun ’11, and the rental escalation of several existing properties, offset by the divestment of 6 strata units at Toh Guan Road East (compulsory land acq by the Spore Land Authority for public works).
Avg occupancy rate declined slightly to 99% from almost 100% yoy, but was up marginally from 98.8% qoq.

DPU of 1.036cts, -16.3% yoy due to a 1-for-8 rights issue in Apr ’11, but +3.5% qoq. Annualized distribution of 4.155cts translates to 8.2% yield.
Gearing ratio is 32.7%, leaving further headroom for acquisitions. All in debt cost is 4.23%, of which 89% of interest rate exposure is fixed for the next 2.9yrs.
Though Collier’s highlighted that the expansion of Spore’s economy in 2011 should help firm demand for industrial properties, mgt cautions that the impact from the Japan earthquake is a dampener that may moderate growth in rental and capital values for the next 12 mths. Nevertheless, mgt expects to deliver a stable and secure income stream through maintaining high occupancy levels and acq new properties.
The Trust now has 45 properties with an aggregate book value of $1b, with a weighted avg lease to expiry (WALE) of 3.7yrs.
NAV rises to 62cts from 60.7cts at end ’10, and translates to valuation of 0.8x P/B.
Just prior to 2Q results, Mackenzie Cundill Recovery Fund ceased to be significant sh/h, after paring its stake from 6.03% to 4.93% via block sale.