Multiple  acquisitions  and  AEIs  a  positive  for  DPU.  Since  the  beginning  of  the year, CIT has completed three acquisitions (namely: 16 Tai Seng Street, 25 Pioneer Crescent  and  3C  Toh  Guan  Road  East)  and  proposed  a  future  acquisition  at  30 Teban Gardens Crescent. Together  with the completion of the  BTS project at Tuas View  Circuit  by  August  2012,  we  expect  CIT's DPU to grow by  c.0.5S''  (+12%)  in FY12.

Pro-active  management  with  room  for  slight  positive  reversion.  CIT's management continues to be pro-active in engaging tenants early on negotiations of lease renewals  in a  bid to  reduce  lease concentration.  Average  lease expiry  profile for  FY13/14  continues  to  decline  to  46.3%  from  >50.0%  last  year.  Currently, CIT's portfolio  occupancy  is  at  99.1%,  together  with  a  high  average  security  deposit  of 12.9  months,  and  a  WALE  of  3.1  years,  we  believe  CIT's portfolio  will  continue  to remain defensive amid a volatile global economy. 

Acceptable  gearing  amid  multiple  acquisitions.  Management  has  been undertaking  a  portfolio  reconstitution  exercise  since  beginning  of  2010,  divesting nonperforming assets and redeploying capital into yield accretive acquisitions. Amid multiple  acquisitions,  gearing  has  been  pared  down  from  42.6%  in  Dec  2009  to 35.8% in Jun 2012. With an internal target gearing 40%, CIT will still has some room for further acquisitions. Together with an attractive yield of 8% and a strong pipeline of acquisitions, we maintain our BUY rating with a revised TP of S$0.660.

Source: OSK