CIT – BT

CIT Q3 distributable income dips 3.6%

CAMBRIDGE Industrial Trust (CIT) yesterday reported steady financial results for its third quarter.

Distributable income was down 3.6 per cent from a year earlier to $10.81 million. Distribution per unit was 1.187 cents.

The dip in distributable income was accompanied by a 2.6 per cent decline in gross revenue to $18.21 million, mainly due to lower rental income resulting from the sale of some properties and strata units between October last year and Sept 30, 2010.

Occupancy rate remains high at 99.97 per cent, ‘higher than the national average of 92.3 per cent’, CIT said.

The book value of its investment properties was $838.5 million at Sept 30, down from $874.2 million at Dec 31, 2009.

During Q3, CIT acquired two industrial properties. On Sept 16, it conducted a private placement exercise that raised $40 million, $24.7 million of which was used to partly fund the acquisition of the two properties for a total $37.7 million.

CEO of CIT Chris Calvert said that the ‘strong interest from institutional and certain private investors in the recent private placement demonstrates the attractiveness of CIT as a Reit investment’.

Further boosting its financial flexibility, CIT has secured a new three-year acquisition term loan and revolving credit facility totalling $70 million.

The company also moved to strengthen its balance sheet during Q3. It has reportedly reduced its gearing ratio to 39 per cent from 42 per cent, after repaying part of a $32 million term loan. It has earmarked an additional $35 million from divestments to a loan repayment on Nov 17 that will further bring its gearing to 36.8 per cent.

Following the September private placement, CIT unitholders had an advance distribution of 0.68 of a cent per unit. They will receive the balance of 0.507-cent per unit on Nov 30.

The CIT counter closed a cent higher at 56.5 cents yesterday.