Cambridge's proposed acquisition of 25 Tai Seng Avenue - 2 SEP 2010

Cambridge's proposed acquisition of 25 Tai Seng Avenue. See press release.

Key Points

• Cambridge Industrial Trust Management Limited, as manager of Cambridge Industrial Trust (“CIT” and the manager of CIT, the “Manager”), is pleased to announce the proposed acquisition of the property located at 25 Tai Seng Avenue, Singapore 534104 (“25 Tai Seng Avenue”).
• The Acquisition is subject to the Vendor’s shareholders approval and is expected to be completed in 4th quarter of 2010.
• The building at 25 Tai Seng Avenue was completed in 2009. It comprises a seven-storey light industrial building located within the Paya Lebar iPark. 
• The appraised value of 25 Tai Seng Avenue, based on a valuation conducted by Colliers International Consultancy & Valuation (Singapore) Pte Ltd (“Colliers”) on 5 August 2010 using the direct comparison method, discounted cash flow analysis and the capitalisation approach, is S$21.5 million.
• The purchase consideration of 25 Tai Seng Avenue is S$21.1 million, which was arrived at on a willing-buyer and willing-seller basis, based on the appraised valuation conducted by Colliers.
• The estimated total cost of the Acquisition is approximately S$21.5 million, comprising:


• the purchase consideration of 25 Tai Seng Avenue of S$21.1 million; 
• the acquisition fee payable to the Manager under the trust deed dated 31 March 2006 constituting CIT entered into between the Trustee and the Manager (as amended) in respect of the Acquisition, which amounts to approximately S$0.2 million; 
• the professional and other fees and expenses incurred or to be incurred in connection with the Acquisition which amount to approximately S$0.2 million.


• CIT has sufficient financial flexibility and capacity to fund the Acquisition which is expected to complete by 4th quarter of 2010.
• The Manager believes that 25 Tai Seng Avenue is a quality industrial asset that has been purchased at an attractive yield which is comparable or better than yields of recent transactions in the market. Additionally, the acquisition of 25 Tai Seng Avenue will further reduce the reliance of CIT’s income stream on any single asset and tenant, increase the weighted average lease tenure of CIT’s portfolio as at 30 June 2010 and reduce CIT’s lease expiry concentration in 2013 and 2014.