Cambridge Industrial Trust reports lower DPU for Q4

CAMBRIDGE Industrial Trust (CIT) announced on Thursday a lower distribution per unit (DPU) of 1.139 Singapore cents for the fourth quarter ended Dec 31, 2015, down 9 per cent from the DPU of 1.252 cents a year ago due to reduced capital distributions.

For the full year 2015, DPU fell by 4.2 per cent to 4.793 cents from 5.004 cents a year ago.

Gross revenue for Q4 rose 8.7 per cent to S$28.49 million, from S$26.22 million a year ago. For FY2015, it increased 13 per cent year-on-year to S$112.2 million. Net property income (NPI) rose 10.7 per cent in Q4 to S$21.61 million, from S$19.52 million. For the full year, it increased 10.7 per cent to S$86.2 million.

"CIT's portfolio sustained double-digit NPI growth for three consecutive quarters this year, with positive rental reversions of 9.1 per cent and above industry average occupancy. Our prudent capital management has been the highlight of 2015," said Philip Levinson, CEO of Cambridge Industrial Trust Management, the manager of the trust.

Weighted average lease expiry (WALE) and portfolio occupancy remain steady at 3.8 years and 94.3 per cent respectively.

As at end-2015, CIT's portfolio consisted of unencumbered investment properties of around S$1.2 billion. The trust has a well-staggered debt maturity profile, with more than 97 per cent of interest rate exposure fixed for the next three years and no refinancing requirements until FY2017. Gearing remains in the manager's target range at 36.9 per cent.

Looking ahead, pressures on rental terms are expected due to the softer economic environment. The conversion of properties from single tenancy to multi-tenancy is also expected to continue to have a negative impact on portfolio occupancy and net property income during 2016.

The manager said it would be conducting a strategic review of its business and operations in the light of the current market conditions and the latest developments in the Reit (real estate investment trust) market in Singapore.

"We will continue to seek appropriate opportunities in Singapore, Australia and Japan in order to achieve sustainable growth and increase unitholder returns. With more than 20 per cent of our portfolio due for lease renewals in the coming year, proactive asset management will be key to delivering value through conversions and asset-enhancement initiatives," Mr Levinson added.