Cambridge – SGX
CIT ACQUIRES 120 PIONEER ROAD AND 7 UBI CLOSE FOR A TOTAL OF S$47.0 MILLION
1. Cambridge Industrial Trust Management Limited (the “Manager”), the Manager of Cambridge Industrial Trust (“CIT”), has identified 120 Pioneer Road and 7 Ubi Close (the “Properties”) to be acquired by CIT at a purchase price of S$26,500,000 and
S$20,500,000 respectively (the “Acquisitions”).
2. In connection with the Acquisitions, RBC Dexia Trust Services Singapore Limited, as trustee of CIT (the “Trustee”), has entered into separate conditional put and call option agreements (the “Option Agreements”) with Compact Metal Industries Ltd (“Compact”), a SGX-listed company and Group Exklusiv Pte Ltd (“Group Exklusiv”) respectively, to acquire the two Properties.
3. The acquisitions are expected to be financed by debt or alternative funding sources in line with the Manager’s capital management strategy in optimizing the funding of the Trust. The above Property will be accretive to CIT’s distributable income.
4. Information On The Properties (Extracts)
120 Pioneer Road
– Purchase Price : S$26.5 million
– Leasehold estate of 30 years + 28 years wef 16 Feb1997
– Lease term : 7 years with 5% rental escalations on the commencement of the third
and fifth year.
– DPU Impact : +0.0557 cents
7 Ubi Close
– Purchase Price : S$20.5 million
– Leasehold estate of 30 years wef 1 Aug 1994
– Lease term : 7 years with 5% rental escalations on the commencement of the third
and fifth year.
– DPU Impact : +0.1687 cents
Note : DPU Impact is based on simple annualisation on the audited results for the financial period ended 31 December 2006 and the assumption that CIT had purchased, held and operated the respective property for the same annualised period based on long term gearing ratio of 40%.
Source : SGX
Macarthurcook Industrial REIT – OCBC
Macarthurcook Industrial REIT: Ideal candidate for takeover
Management expects S$500m of acquisitions by Mar 08. Even though MI-REIT’s current asset size is small at S$316m, management has ambitious growth plans. It sees S$500m of possible acquisitions by end Mar 08. Furthermore, it expects the bulk of these acquisitions to be from third party and not from the exercising of its first right of first refusal with its sponsor. This means its acquisition will likely be in direct competition with the 3 other REIT rivals in the industrial space. As we see little differentiating factors between all the REITs’ acquisition strategies, the only way we see MI-REIT to be able to achieve this target is via pricing. In that context, MI-REIT can afford to be very aggressive. Its gearing remains low at about 8%, meaning any acquisition is likely to be debt funded. We estimate MI-REIT has a debt capacity of about S$117m. More importantly, with its cost of debt at about 3.5%, and with market property being offered at just below 7.0%, MI-REIT has about 350bp to play. However, we do not see MI-REIT to be willing to use up all its ammunition in the short term. Acquisitions at property yields of about 6.0-6.5% are the more likely scenario.
Ideal candidate for takeover. MI-REIT has a fairly fragmented shareholding structure. Its largest shareholders have a stake of about 12.9% but with the majority in 5% range. Its sponsor Macarthurcook only has a 2.3% stake and the vendors collectively own a further 2.7% of the issued units. The implication of this loose shareholding structure is that if the right offer comes along, the possibility of shareholders taking profit is very high. Furthermore with a price to book of about 1.3 times, it remains fairly cheap relative to its larger rivals. We thus see MI-REIT to be an ideal takeover candidate. We do not have a rating on MI-REIT. (Winston Liew)
AllCo – SGX
COMPLETION OF ACQUISITION OF THE CENTRELINK PROPERTY
Singapore, 18 June 2007 – Further to the announcements made by Allco Commercial Real Estate Investment Trust (“Allco REIT”) on 25 June 2007 and 11 June 2007 in relation to the approval of Unitholders at the Extraordinary General Meeting (“EGM”) of the proposed acquisition of a 50.0% indirect interest in the Centrelink Property, the Board of Directors of Allco (Singapore) Limited, as Manager of Allco REIT, is pleased to announce that Allco REIT has today successfully completed the acquisition of a 50.0% indirect interest in the Centrelink Property for A$108.75 million (S$136.5 million 1). Record Realty, a property trust listed on the Australian Securities Exchange (ASX: RRT), will hold the remaining 50.0% indirect interest in the Centrelink Property, which it has acquired for A$109 million.
The purchase consideration is based on the average of two independent valuations2 of the Centrelink Property from CB Richard Ellis Pty Limited and Colliers International Consultancy and Valuation Pty Limited. Cash payment of the purchase consideration will be made upon the close of the Rights Issue which was approved by Unitholders at the EGM on 11 June 2007.
The Centrelink Property is a new contemporary designed, five storey “Grade A” office complex with a net lettable area of approximately 430,556 sq ft. It is strategically located within the core of the Tuggeranong Town Centre, one of four town centres within the city of Canberra, Australia’s capital city and the location of the Federal Parliament House.
The Centrelink Property will be fully leased by the Centrelink National Support Office (a statutory agency of the Australian Federal Government), for an initial period of 18 years, expected to be as and from 4 July 2007. The rental structure incorporates a rental escalation of 3.0% per annum for each year of the lease.
1 Based on an exchange rate of S$1.00 = A$0.7964, being the rate at which Allco REIT has entered into a foreign exchange derivative instrument to purchase the Centrelink Property.
Source : SGX
MI-REIT : BT
MACARTHURCOOK Industrial Reit (MI-Reit) has failed in a legal bid to have the termination of an option agreement on a proposed $32.5 million acquisition – Liang Huat Industrial Complex – declared invalid. But the Reit is considering an appeal.
Its manager, MacarthurCook Investment Managers (Asia), said yesterday the High Court has dismissed the Reit’s originating summons. The Reit and its trustee sought to set aside the termination of the option agreement by KWD, the vendor of Liang Huat.
The agreement comprised a call and put option. Under the call option, MI-Reit could exercise its right to buy Liang Huat for $32.5 million between Dec 5, 2006, and April 30, 2007. Under the put option, KWD had the right to sell the property during a period of one business day – or any other mutually agreed period – starting from the expiry of the call option.
Earlier this year, KWD sought to terminate the option agreement, alleging that certain pre-conditions were not satisfied within the required time period.
As mentioned in its IPO prospectus, MI-Reit started proceedings in the High Court in response, seeking a declaration that the termination by KWD was invalid. An MI-Reit spokeswoman said the Reit’s originating summons was dismissed by the court because of a technicality.
Chris Calvert, chief executive of MacarthurCook Investment Managers, said: ‘We are extremely disappointed with the result and are presently working through the judgment in detail in conjunction with our lawyers and considering any avenues of appeal that might be open to us. Any decision will be based on what we consider to be in the best interests of MI-Reit’s investors.’
MI-Reit’s manager also said the outcome of the proceedings is not expected to have a material impact on the Reit’s financial performance or results.
MI-Reit was listed on the Singapore Exchange in April this year. Its initial portfolio of 12 industrial properties in Singapore did not include Liang Huat.
In its prospectus, the Reit, which has forecast a distribution yield of 6.18 per cent based on this initial portfolio for the year ending March 2008, said the yield would be 6.45 per cent if Liang Huat were added on July 1, 2007, and 6.36 per cent if it were added on Oct 1, 2007.
For the year ending March 2009, the projected yield is 6.68 per cent if Liang Huat were in the portfolio, compared to the base case of 6.32 per cent.
MI-REIT : SGX
Singapore, 15 June 2007 – MacarthurCook Investment Managers (Asia) Limited (the “Manager”), the Manager of MacarthurCook Industrial REIT (“MI-REIT”) announced today that the High Court of Singapore (‘High Court”) had dismissed its Originating Summons in respect of MI-REIT’s proposed acquisition of Liang Huat Industrial Complex (“Liang Huat”).
As disclosed in its prospectus, MI-REIT and the Trustee had sought to set aside termination of the Put and Call Option Agreement by the vendor of Liang Huat.
Chris Calvert, Chief Executive Officer of the Manager, said, “We are extremely disappointed with the result and are presently working through the judgment in detail, and considering any avenues of appeal that might be open to us, in conjunction with our lawyers. Any decision will be based on what we consider to be in the best interests of MI-REIT’s investors.”
The Manager confirmed that the outcome of the proceedings was not expected to have a material impact on the financial performance or results of MI-REIT.
Source : SGX