Cambridge – DMG

Detail s of potential acquisition revealed

Acquisiti on of 5 & 7 Gul Street 1. Cambridge Industrial Trust (CIT) has entered into a put and call option agreement with Precise Industries Pte Ltd in connection with the proposed acquisition of the property at 5 & 7 Gul Street 1. This proposed acquisition has previously been referred to as ‘Potential Property 2’ during the rights issue announcement on 10 Mar 2011. In the latest announcement, the purchase price of 5 & 7 Gul Street 1 has been revised upwards from S$12.5m to S$14.5m. In addition, initial rental for the lease has been agreed at S$1.36m/year which works out to be ~9.4% gross rental income yield. Previously, we have assumed 8% gross yield from this acquisition. Following the announcement, we revised our FY11-12 DPU estimates upwards by 0.2-0.1% respectively. Maintain BUY with unchanged TP of S$0.59.

Detail of another potential acquisition yet to be revealed. During Mar 2011, CIT revealed that it was undertaking rights issue in order to finance the purchase of 4 & 6 Clementi Loop and two other properties in Western part of Singapore. Whilst one of them has been revealed as 5 & 7 Gul Street 1, the other potential acquisition in the west remains anonymous. Previously indicated purchase price of this anonymous acquisition was S$41m. We have factored in a gross yield of 8%, implying gross rental income contribution of S$3.3m/year to CIT (~4% of our FY12 gross rental income estimate).