ESR Reit (former Cambridge Industrial Trust)

[winston]

Not vested.

RESEARCH ALERT-BNP Paribas starts Cambridge Trust at buy

SINGAPORE, June 9 (Reuters) - BNP Paribas has started coverage of Cambridge Industrial Trust with a "buy" rating and a price target of S$0.90, a 25 percent upside to its last traded price of S$0.72.

BNP Paribas analyst Jonathan Ng said acquisitions may spur Cambridge's share price in the short-term.

He added the property trust could receive potential takeover offers, which may boost the stock in the medium term.

[winston]

Cambridge Industrial Trust – Oxley Capital has acquired a further 20% stake in Cambridge Industrial Trust Mgt Ltd from CWT Ltd for S$ 7.36m, bringing its stake in the REIT manager to 40%.

Furthermore, Oxley also buys out CWT’s 50% stake in Cambridge Industrial Property Management Ltd for S$ 1.84m.

[winston]

Not vested.

DBS Research is initiating coverage on Cambridge Industrial Trust with Buy recommendation and target price of S$ 0.88.

CIT attraction for investors will be its
i) earnings stability from an asset portfolio leased on a long term basis (average rental expiry of 6.4 years) with built in escalation clauses providing organic growth.
ii) S$ denominated earnings which is expected to remain strong against other currencies over the
medium term.

[winston]

Not vested.

Cambridge Reit expects to be sharia compliant soon

HONG KONG - Singapore's Cambridge Industrial Trust expects to declare itself 'sharia compliant' early next week, sources familiar with the matter told Reuters, in an effort to draw investment from the Middle East.

The property trust has asked the Islamic Bank of Asia to conduct due diligence, and an initial report has shown that few of its 43 assets were not in line with sharia principles.

One of the sources said the bank's sharia board was due to meet in Kuwait over the weekend and would probably give the go-ahead for the trust to announce it is sharia compliant.

New investors have been lined up to buy stakes in the trust following the move, the source said.

A manager of Cambridge Industrial Trust declined to comment on the matter.

Asia's once-hot real estate investment trust (Reit) markets have slumped in the last year as the global credit crunch raised expectations that debt refinancing would be difficult and expensive.

Singapore-listed Reits, with a market capitalisation of US$19 billion, have fallen 35 per cent since a peak a year ago and are now yielding on average 6 per cent against 2008 dividend forecasts.

Units in Cambridge have also fallen 35 per cent since a peak in late June 2007, and are down 11 per cent this year.

Units in the trust were trading at S$0.63 on Thursday afternoon, down 1.56 per cent on the day.

In a note to clients on July 9, UBS analyst Alastair Gillespie said 'potential rebranding of Cambridge could bring the price closer' to the trust's net asset value of S$0.76 per unit. -- REUTERS

[market-uncle]

Had been looking at this for a while, looked up its annual report to found out its strengths:

# Diversified industrial portfolio in many sectors, manufacturing, service & commerce etc.
# Long term lease of 5 to 15 years
# Strategically located properties in key industrial zones spread across Singapore
# Built-in rental escalations to provide organic growth

Any comments?

Not vested ... yet

[subprimesteakhouse]

Had been looking at this for a while, looked up its annual report to found out its strengths:

# Diversified industrial portfolio in many sectors, manufacturing, service & commerce etc.
# Long term lease of 5 to 15 years
# Strategically located properties in key industrial zones spread across Singapore
# Built-in rental escalations to provide organic growth

Any comments?

Not vested ... yet

credit risk from small tenants. too singapore centric. even the locations in sg r not attractive. might as well go for a-reit?

[ishak]

2Q 2008 Results Released 29 July 2008

CIT outperforms annualised DPU forecast by 13%

Key Achievements
• Commenced process to achieve Shariah Compliant status
• Mandated HSBC for Shariah-compliant debt termout
• Realisation of benefits from interest rate hedging program
• Oxley Capital Group contracted to acquire further 20% stake in CITM
• Acquisition of one property worth S$10.4 million
• Signed Option Agreements valued at S$62.8 million

General Market Outlook
• Singapore economic growth is expected to moderate in 2008 but remains healthy
• Fundamentals supporting Singapore property markets are stable
• Demand for industrial space is steady, underpinned by healthy economic growth and strong fixed assets investments
• Singapore industrial property market outlook remains positive for 2008

Strategic acquisitions to continue at a moderated pace in 2008
• Signed Option Agreements valued at S$62.8 million
• S$121 million debt - funded capacity before leverage exceeds 45%
• Offshore acquisitions – Malaysia first
• Portfolio and structure identified
• Dependent on equity raising – Other possibilities include Korea, India, Vietnam, China

Key Value Propositions
• Quality Portfolio
• Prudent Capital Management
• Strong Track Record of Accretive Growth
• Shariah Compliance

MISC
• NAV: S$0.79 (previous S$0.76)
• EPU: 3.83 cents
• Gearing Ratio: 36.9%
• Weighted Average Effective Interest Rate 2Q2008: 3.1%
• Interest cover 2Q2008: 5.0 times
• Variable Funding Note Term to Expiry: 7 Months
• Revolving Credit Facility Term to Expiry: 18 Months
• Distribution: 1.561 cents
• Book Closure Date: 7 August 2008
• Date Payable: 29 August 2008

[ishak]

Compelling BUY Due To Attractive Distribution Yield
03 Sep 2008

Defensive strength from earnings visibility. Cambridge Industrial Trust's (CIT) weighted average lease term to expiry was 6.4 years as at Jun 08. There are no expiries from 2008 to 2010. The bulk of the leases will expire in 2013 and beyond. CIT is well protected by security deposits averaging 17 months in the form of bankers' guarantees. Leases are structured with periodic rental step-ups of 5% every two years or 7% every three years, thus providing steady organic growth of 2.5% p.a. Its top 10 tenants accounted for 62.6% of gross rent in Jun 08. Its largest tenant, CWT Limited, accounts for 14.1% of gross rent. Management expects current occupancy of 100% to be maintained in 2H08.

Seeking refinancing via Islamic finance. CIT plans to refinance S$390m variable funding notes expiring in Feb 09 with Shariah-compliant three-year syndicated Ijara (Islamic sale & leaseback). The transaction is subject to approval by unitholders and is expected to be completed by 3Q08. Management expects Islamic Finance to reduce cost of borrowings by at least 20bp compared with conventional banking facilities. CIT will be the first Shariah-compliant real estate investment trust (REIT) listed in Singapore after completing the conversion process.

CIT provides distribution yield of 10.3% for 2009, an attractive spread of 7.2% over 10-year Singapore government bond yield of 3.1%. Its share price has also corrected 39.3% from the peak of S$0.98 in mid-07 and is trading at 12.5% below the price of S$0.68 during the IPO in Jul 06. We have conservatively factored in cost of borrowings of 4.5% to reflect the risk of refinancing short-term borrowings. Initiate coverage with a BUY recommendation and target price of S$0.89 based on the two-stage dividend discount model (required rate of return: 8.5%, growth: 2.8%).

[ishak]

CIT COMMENCES EVICTION ACTION AGAINST OLIVINE MAGNETICS
03 Sep 2008

Cambridge Industrial Trust Management (“CITM”), the manager of Cambridge Industrial Trust (“CIT”), on legal advice today commenced proceedings to evict Olivine Magnetics Pte Ltd (“Olivine”) from premises owned by CIT at 130 Joo Seng Road (“the Property”).

An on-demand bank guarantee held as a rental deposit in relation to the Property has already been called. CITM does not expect the eviction proceedings to have a material impact on the earnings of CIT. CIT intends to commence re-tenanting the property when eviction proceedings are complete; in particular CIT intends to commence negotiations with Olivine’s existing subtenants in the Property as soon as practicable.

On completion of the eviction proceedings, CIT’s occupancy across its portfolio will be 98.3%.

[ishak]

OUTPERFORM: Steady income generator
Price: S$0.56 @11/09/08
Target: S$0.90

• Assets have nearly doubled in size since listing. Listed on the SGX on 25 Jul 06, Cambridge Industrial Trust (CIT) is a real estate investment trust (REIT) that invests in income-producing industrial assets. Its assets have nearly doubled from S$519m at the time of listing to S$967m as at 30 Jun 08. Properties under management also increased from 27 to 43. All of CIT’s assets are located in Singapore. However, management has a mandate to acquire industrial properties in Asia.

• Visible earnings from long leases with built-in rent increases. Long lease tenures averaging 6.4 years, built-in rent increases, controlled property expenses as well as resilient demand from the manufacturing sector add visibility to CIT’s earnings in the medium term.

• Full shariah compliance positive for future funding. CIT is in the midst of conversion to full shariah compliance, which will enable it to cultivate a new investor pool when it raises capital or issues debt.

• Initiate with Outperform rating and target price of S$0.90. Using DDM valuation, we initiate coverage with a target price of S$0.90 (discount rate 8.0%, terminal growth 2%). This offers a total prospective return of 72% from potential price upside of 61% and a forward yield of 11%. Its current price of S$0.56 is at an all-time low since listing and a 29% discount to its NAV of S$0.79, representing an attractive entry point in view of its visible earnings and attractive dividend yields.