Cambridge – BT

CIT’s Q2 distributable income rises 14%

CAMBRIDGE Industrial Trust’s (CIT) distributable income rose 14 per cent to $12.3 million for the second quarter compared to a year ago.

Its distribution per unit (DPU) for the three months to end-June was 1.036 cents, down 16.3 per cent from 1.238 cents in Q2 2010.

Compared to the distribution of 1.001 cents per unit in Q1 this year, its DPU rose 3.5 per cent. The latest distribution will be paid on Aug 25, the trust’s manager said.

Despite an expected slowdown in economic growth in the second half of the year, CIT’s manager said that it expects to be able to deliver ‘a stable and secure income stream to its unitholders by maintaining high occupancy levels of its existing properties and acquiring new properties that enhance CIT’s distributions’.

Revenue for the industrial real estate investment trust climbed 6.6 per cent to $19.5 million in Q2 compared to the same period a year ago, mainly due to higher rental income after the acquisition of five properties from September last year to June this year.

Its net property income – after deducting land rents, fees, taxes and other property expenses – rose 4.9 per cent to $16.9 million, from $16.1 million a year earlier.

Non-property expenses nearly doubled to $14.1 million, from $7.3 million a year ago, due mainly to a sharp rise in borrowing costs from $5.7 million to $12.4 million.

That increase was mainly due to accelerated amortisation of fees and costs related to a $303.1 million syndicated term loan that was refinanced with a new $320 million term loan in June, and break costs associated with the refinancing.

For the first six months of the year, CIT’s distributable income rose 10.7 per cent to $24.2 million, as revenue rose 5.2 per cent to $38.8 million.

The trust had total assets of $1.097 billion at the end of June, up from $1.001 billion at end-2010.

Its portfolio at end-June comprised 45 properties with 657,749 square metres of lettable area, leased to 105 tenants. The total portfolio value was about $1.003 billion. The average occupancy rate for its properties in Q2 was 99.02 per cent, with a weighted average lease to expiry of 3.7 years.

CIT units last traded at 50.5 cents yesterday before the earnings announcement, up half a cent from Monday’s closing price.