CIT reported its FY07 results that were largely in-line with our projections, backed by properties acquired during the past year. Gross revenue came in at S$53 million and net property income is S$45.8 million. CIT achieved a full year DPU of 6.262 cents. Net asset value increased from $0.67 to $0.76.
Results in-line with our estimates. Revenue came in within 1.5% of our forecast of S$52.3 million, net property income of S$45.8 million versus our forecast of S$45.9 million. Full year DPU is higher by 4% than our forecast of 6.02 cents.
Revenue growth backed by accretive acquisitions. CIT expanded its portfolio from 27 properties with an asset value of S$531 million to 40 properties worth S$928 million at year-end with the acquisition of 13 properties during the year. In January this year, CIT managed to seal another 2 deals and has signed $125.6 million worth of MOU.
Capital management strategy. During the results briefing, management laid out their capital management plan for the year. Since the successful equity fund raising in October last year, CIT gearing has lowered to 36% and it has $131 million in undrawn facility available. Management intends to take advantage of the low interest rate environment so as to lock in the low rate whenever possible. In the longer term, management intends to refinance through CMBS issues.
Plans ahead. Management remains confident on growing via acquisition whether locally or venturing overseas and reiterates its target of S$500 million worth of acquisition p.a.
Valuation and recommendation. The current market conditions may prove difficult for REIT to pursue growth via acquisition as the cost of equity increases. On hindsight, CIT managed to raised S$193.9 million and completed 7 acquisitions just before market sentiment turns awry. With gearing at 36% and $131 million in available credit facility, CIT has no worries about funding in the short term. We maintain our favourable stance on CIT. Our optimism in CIT stems from the stable underlying cash flow and DPU growth from potential accretive acquisitions. Fair value is lowered from $1.07 to $0.89 as we raised our assumptions for beta and risk premium to reflect volatile market condition and factor in conservatism.
Major shareholders: Schroder Investment Management 6.04%, Capital Research and Management 4.2%.
Results in-line with our estimates. Revenue came in within 1.5% of our forecast of S$52.3 million, net property income of S$45.8 million versus our forecast of S$45.9 million. Full year DPU is higher by 4% than our forecast of 6.02 cents.
Revenue growth backed by accretive acquisitions. CIT expanded its portfolio from 27 properties with an asset value of S$531 million to 40 properties worth S$928 million at year-end with the acquisition of 13 properties during the year. In January this year, CIT managed to seal another 2 deals and has signed $125.6 million worth of MOU.
Capital management strategy. During the results briefing, management laid out their capital management plan for the year. Since the successful equity fund raising in October last year, CIT gearing has lowered to 36% and it has $131 million in undrawn facility available. Management intends to take advantage of the low interest rate environment so as to lock in the low rate whenever possible. In the longer term, management intends to refinance through CMBS issues.
Plans ahead. Management remains confident on growing via acquisition whether locally or venturing overseas and reiterates its target of S$500 million worth of acquisition p.a.
Valuation and recommendation. The current market conditions may prove difficult for REIT to pursue growth via acquisition as the cost of equity increases. On hindsight, CIT managed to raised S$193.9 million and completed 7 acquisitions just before market sentiment turns awry. With gearing at 36% and $131 million in available credit facility, CIT has no worries about funding in the short term. We maintain our favourable stance on CIT. Our optimism in CIT stems from the stable underlying cash flow and DPU growth from potential accretive acquisitions. Fair value is lowered from $1.07 to $0.89 as we raised our assumptions for beta and risk premium to reflect volatile market condition and factor in conservatism.
Major shareholders: Schroder Investment Management 6.04%, Capital Research and Management 4.2%.
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