Cambridge – Lim & Tan

• Cambridge Industrial Trust announced that it had divested its entire stake in the freehold property located at 63 Hillview Avenue, Lam Soon Industrial Building for a consideration of S$140 million to mainboard-listed Enviro-Hub Holdings and BS Capital.
  
• This represents approximately 28% above the current book value of Cambridge’s entire stake in the Property of S$110 million. This is in higher than Cambridge’s current P/B value of 1.1X for the overall Group.
  
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  Assuming the whole amount would be used to reduce debt, its gearing ratio is expected to reduce from the current 38.6% to 30.4% which is at the lower range of management’s preferred guidance of 30% to 40%. Likewise, its dividend per unit (DPU) is expected to increase by 0.06 cents to 4.844 cents, and its net tangible asset per unit could rise by 2.53 cents to 67.33 cents.
  
• This divestment by Cambridge is expected to be well received by the market, given that the yield on the Lam Soon Industrial Building is much lower than that of its overall assets. Going forward, we believe that Cambridge has the capacity to undertake further accretive acquisitions given that its gearing is brought down by this asset disposal.