With Its Manager’s Owner Possibly Changing, What Does the Future Hold for Cambridge Industrial Trust?

This morning, Cambridge Industrial Trust (SGX: J91U) announced that there are parties interested in buying up 80% of its manager. How might the deal affect the industrial real estate investment trust?

Cambridge Industrial Trust is managed by Cambridge Industrial Trust Management Limited (CITM). CITM is owned by three major shareholders, namely nabInvest Capital Partners, Oxley Global, and Mitusi. nabInvest, which is the investment arm of National Australia Bank, owns a 56% stake in CITM. Meanwhile, Oxley Global is the next largest shareholder with a 24% interest. The remaining 20% belongs to Mitsui, a Japanese conglomerate.

nabInvest and Oxley Global are the shareholders in question in Cambridge Industrial’s Trust announcement this morning. In fact, Oxley Global had first made known back in 14 August 2015 that someone had knocked on its door regarding a possible sale of the 24% chunk of CITM.

If both nabInvest and Oxley Global were to sell their combined 80% stake in CITM it would mean a major change in management for Cambridge Industrial Trust.

Possible future growth

Cambridge Industrial Trust’s future will depend on who eventually becomes the major shareholder of its manager. If the new controlling shareholder is involved with real estate, it may present Cambridge Industrial Trust with a ready pipeline of future acquisition opportunities.

At the moment, Cambridge Industrial Trust is focused only on industrial properties in Singapore. Its tenants mostly come from the manufacturing, transportation & storage, and wholesale & retail sectors. Future property injections might help diversify the REIT’s portfolio in terms of geography and/or its tenant base.

But, if the new major shareholder of the REIT’s manager is in other fields other than real estate, there may not be major changes to the structure of Cambridge Industrial Trust even if the deal does go through.

Nothing is set in stone at the moment and Cambridge Industrial Trust will make the relevant announcements as and when needed. It’d be interesting to see how this all turns out.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim doesn’t own shares in any companies mentioned.