C A M B R I D G E I N D U S T R I A L T R U S T
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CHAIRMAN’S & CHIEF EXECUTIVE OFFICER’S JOINT MESSAGE
LETTER TO UNITHOLDERS
Dear Unitholders,
On behalf of the Board of Directors of CITM, we are
pleased to present CIT’s FY2015 Annual Report for the
year ended 31 December 2015 (“FY2015”).
Challenging Times
FY2015 was a difficult year for CIT. We were faced with
a highly competitive industry environment and slow
economic growth in Singapore. The competition in asset
leasing and acquisitions in the industrial real estate sector
was especially intense.
Despite these challenges, we are pleased to report that
as a result of the Manager’s strategy and clear focus on
the key result areas of asset management and capital
management, CIT demonstrated business resilience and
recorded a set of steady financial results. In FY2015, over
one million square feet of CIT’s space was renewed at a
positive weighted rental reversion of 9.1%, with portfolio
occupancy of 94.3%, well above JTC’s industry average.
Given the challenging nature of identifying suitable
acquisitions in Singapore, we retained a disciplined
approach and only acquired $27.2 million worth of yield
accretive assets in FY2015, bringing CIT’s portfolio to 51
properties.
Our succession planning strategy continued its
smooth transition. We appointed a new Chief
Operating Officer and Chief Financial Officer (“COO
and CFO”), Mr Shane Hagan, in January 2016 who
has further built on the strong platform established
by his predecessor. Our sincere thanks must go to
Mr Hagan’s predecessor, Mr David Mason for his six years
of service and significant contributions to CIT.
CIT DEMONSTRATED BUSINESS RESILIENCE
IN FY2015
With another challenging year ahead of us, we remain
focused steadfastly on our mission of providing CIT
Unitholders with a stable and secure income stream,
through prudent capital management and proactive asset
management, with the intention of delivering long-term
capital growth.
Resilient Financial Performance
Gross total revenue for the year was up 13.0% to $112.2
million andnet property income (“NPI”) increasedby 10.7%
to $86.2 million. Distribution per Unit (“DPU”) for FY2015
stood at 4.793 cents. Although DPU was down year-on-
year (“y-o-y”), it reflected a better quality of earnings, as
the Manager reduced the amount of distributions from
capital sources and in Q4 2015, management fees were
paid in cash as opposed to a combination of cash and units
in previous quarters. Adjusting for capital distributions and
fees paid in units, the core DPU grew y-o-y.
The take-up rate for CIT’s Distribution Reinvestment Plan
(“DRP”) continued to be consistent and favourable at
approximately 24% take up for the full year. The DRP is
a very important funding mechanism for REITs and it has
allowed CIT to reduce the amount of cash paid out as
distributions and increase capital availability for ongoing
capital expenditure requirements. CIT’s balance sheet
thus remains strong with gearing currently within the
midpoint of our target range of 30% to 40%, providing
some debt headroom to support any acquisition and asset
enhancement initiatives (“AEIs”).
As at 31 December 2015, CIT’s total investment properties
were valued at $1.42 billion compared to $1.37 billion last
year. Investment property valuations on a same store basis
were largely unchanged over the previous year after taking
into account capital expenditure spent during the year.
This was largely due to the resilience of CIT’s underlying
DR CHUA YONG HAI
Chairman and Independent
Non-Executive Director
MR PHILIP LEVINSON
Chief Executive Officer (“CEO”)
and Executive Director
