cambridge reit: 27% yield!

Singapore, 30 October 2008 – Cambridge Industrial Trust Management Ltd. (“CITM”), the Manager (“the Manager”) of Cambridge Industrial Trust (“CIT”), is pleased to announce a distribution of 1.490 cents per unit for the quarter 1 July 2008 to 30 September 2008. Mr Ang Poh Seong, CEO of the Manager said “We are pleased to report another set of steady results for 3Q2008 despite the negative economic climate. These results underscore the defensive nature of the industrial sector in general and CIT in particular “Net Property Income exceeded forecast by 8.0% while Distributable Income exceeded forecast by 8.2%. Our annualised DPU of 5.928 cents represents a 7.0% increase over the forecast DPU for the same period. At 30 September 2008, our occupancy rate remains at 100% and we are on track to complete our refinancing.” Stable Yield CIT’s total net distributable income for the quarter was S$11.9 million with an annnualised DPU of 5.928 cents. This represents an annualised yield of 13.6% based on the closing price of S$0.435 per unit on 30 September 2008. (Yesterday price close at S$0.225) All the properties are signed with long leases up to 15 years with fixed rental escalation. The weighted average remaining lease term of CIT’s existing portfolio of 43 properties remained stable at 5.9 years as at 30 September 2008. Property Portfolio As at 30 September 2008, CIT has a portfolio of 43 properties with 656,281.1 sq m of lettable area valued at S$966.8 million. The weighted average land lease on these properties is 40.0 years, excluding freehold property which comprises 5.4% of total lettable area. Approximately 35.2% of the portfolio of properties is in the logistics and warehousing sector, with the next significant segment in the light industrial space accounting for 34.1%; the remaining properties are represented across a well-diversified spectrum of tenant uses such as car showrooms, self-storage facilities as well as industrial and warehousing. CIT executed an interest rate swap on 1 February, 2008, fixing its base interest rate on its entire outstanding debt at that date of S$358 million at 2.58% until 25 July 2013. Singapore Dollar interest rates have risen since that date, supporting CIT’s hedging strategy. The surplus from mark-to-market valuation of CIT’s swap is S$3.3 million as at 30 September 2008. CIT’s remaining S$11.3 million of interest-bearing debt accrues interest at the 1 month Singapore Dollar Swap Offer Rate, plus a margin. The global banking crisis has significantly increased the cost of funds for all borrowers, including REITs. CIT is currently in the process of refinancing its debt; as such the Manager expects the cost of CIT’s debt to be higher in 2009, with a corresponding reduction in distributions. The Manager will advise the quantum of this reduction in distributions when CIT’s refinancing is complete.

CIMB: (CREIT SP / CMIT.SI, OUTPERFORM - Maintained, S$0.24 - Tgt. S$0.52, Property) 3Q08 results were in line with consensus and our expectations. DPU of 1.49cts form 24% of our forecast of 6.14cts for FY08. YTD DPU of 4.6cts forms 75.2% of our full-year estimate, in line. The management warned that cost of funding is expected to increase significantly with a corresponding reduction in distributions. In view of this, we increase our cost of debt assumption from FY09 by an additional 300bps, lowering FY08-10 DPU estimates by 1-25%. We have a lower target price of S$0.52 (from S$0.90) based on DDM valuation at a higher discount of 9.6% (from 8%), which more accurately reflects industry and company specific risks vis-a-vis other REITs under our coverage. Yields for CIT remain the highest within the industrial REIT sector in FY08, and above average S-REIT yields at 15.2%. We remain positive on the relative resilience CIT anchored by its long weighted remaining lease term of 5.9 years. Maintain Outperform.

I feel that in such times, Cambridge should be more transparent, by telling us how much of the loans would mature in 6 months, how much in 12 months and how much beyond 12 months. Also, what are the banks\' asking rates now, as compared to start of the year? The management should come out to assure the investors, rather than the investors having to ask the management at every quarterly briefing.

the reit manager stated that \"The weighted average remaining lease term of CIT’s existing portfolio of 43 properties remained stable at 5.9 years as at 30 September 2008.\" i think that\'s a positive fact. So in the most optimistic scenario, no tenant will be getting lower rentals. the uncertainty lies in the reduction of DPU going fwd after the refinancing is completed. at current yield of 27%, how much will be the new yield then? say, 20%? That\'s a good margin of safety, right?

found this posting at sgdividends.blogspot.com/search/label/Ca...%20Industrial%20Reit UBS is being funny::laugh: 14-10-2008 - UBS increases from 4.98% ---> 5.02% 13-10-2008 - UBS reduces from 5.00% ---> 4.98% 29-09-2008 - UBS increases from 1.97% ---> 5.38% 24-09-2008 - UBS reduces from 5.88% ---> 2.37% 19 -09-2008 - UBS increases from 2.56% ---> 5.82% Wow...won\'t they be incurring some transaction costs there! Anyway this stock is a stock to watch given its many weird transactions by UBS. Maybe Schroder was \"dulan\" and reduced their holdings from 6.05% ---> 5.988% on 10 -10-2008. High dividend yield..yes..lock in long leases..yes ..but small scale tenants amid these troubled times. Watch this stock!

last night, Cambridge announced that UBS has bought 1,044,000 units of the Reit. :woohoo: :woohoo: Now, its stake is 5.05% info.sgx.com/webcorannc.nsf/37e9d50ee377...0416107?OpenDocument