Cambridge Industrial Trust's occupancy rate slipped to 98.6%

From last quarter's 99.2%.

According to CIMB, occupancy slipped to 98.6% (4Q: 99.2%) but this was mainly due to the inclusion of its recently-acquired 54 Serangoon North (55% occupancy) and Lam Soon Building where management refrained from renewals in view of divestment plans.

Here's more:

1Q results met expectations as DPU rose 5% yoy.  FY13 lease expiries have been lowered to 14.1%. Of the single-tenanted leases expiring in 2013, three will be divested and four converted to multi-tenanted leases, which should yield positive rental reversions, barring major downtime.

Conversion into multi-tenanted leases should also not run into major problems with most tenants expected to stay put for now.

Busy year ahead
Debt headroom offered by asset leverage of 35%, coupled with divestment proceeds (S$150m of assets held for divestment) should provide it with ample funds for development, AEIs and acquisitions.

In particular, a collective sale of strata lots at Lam Soon Building, which has been zoned for residential use, was recently re-launched. If successful, significant value could be unlocked, with the funds handy for paying down debt or making other investments.