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Cambridge Industrial Trust: Excess rights results.

Friday, April 15, 2011

I checked my savings account and saw the partial return of funds used in the acceptance of rights and application of excess rights in Cambridge's rights exercise.

In total, I have 4 lots of rights units: 2,125 accepted rights and 1,875 excess rights. Add this to the initial 17 lots which I bought at 51c per unit, I have 21 lots now at an average price of 49.46c per unit. Let's just round it up to 49.5c per unit. With a DPU of 4.84c, post rights, that's a distribution yield of 9.78%.

Related post:
Cambridge Industrial Trust: Going for excess rights.


OT83 said...

Hi Ak,

I only got 1375 excess. entitled is 4125.

wonder how they calcuate the excess.

AK71 said...

Hi OT,

You are a much bigger unitholder than I am. Maybe Cambridge takes care of smaller unitholders better? Haha.. Kidding. I find it strange that anyone should end up with odd lots. You might want to send them an email just to find out, not that it would change anything.

mark said...

entitled 1000. applied 1000 excess. received 0 excess. oh well

Anonymous said...

My case even worse.

Entitled: 5750
Excess: 750

I ended up with odd lot.


Derek said...

All Cambridge fans,

I only have 5 lots to begin with so in total I was allocated 1 lot of excess. My 6 lots average price is $0.603. Using DPU of 4.84c this means a distribution yield of 8%.

AK, this is what I meant of always owning the same stock as you but at a more expensive price but I'm learning. lol.

On the bright side, after holding Cambridge since Dec'07, I'm finally in the black after adding in my past dividends.

Huat Ah!!

AK71 said...

Hi Mark,

You didn't have any odd lots to round up. That is possibly why you did not get any excess rights. That's my guess.

Of course, my suspicion that smaller unitholders are given more excess rights after OT83's comments is unfounded now.

AK71 said...

Hi Victor,

Your experience seems to confirm my suspicion that smaller shareholders would get more excess rights.

The way excess rights were allocated in this exercise seems quite arbitrary though, taking in Mark's experience.

AK71 said...

Hi Derek,

I am definitely not a "fan". Haha.. Wow! You are an old timer of this REIT. ;)

Yes, if a REIT continues with income distribution regularly, in good times and bad times, in the long run, we should not lose money.

Given the very high distribution yields of 9 to 10% some S-REITs are giving now, as long as their capital structures are sound, I am quite sanguine about their near term prospects.

Hwang said...

Seems like smaller holders do get slightly more. Mine was

entitled - 520
excess - 314 (15% of what i registered for)

and the subscribed rate of 2.5x shows that people are still interested in cambridge isn't it?

so comparing cambridge, cache and aimsamp, which is better? because i heard a lot of trouble in the previous aimsamp,

AK71 said...

Hi Hwang,

You share my suspicion? Yes, I think smaller unitholders are getting a better deal.

Cambridge's gearing level has improved from >40% to 35.9%, post rights. NAV/unit drops to 58c/unit though.

Macro-economic conditions are also supportive of industrial properties S-REITs and this might explain partially the strong interest but I am sure that most of the interest is generated by the attractive distribution yield. ;)

As for which REIT is better. The current CEO of Cambridge was the CEO of MI-REIT, the current AIMS AMP Capital Industrial REIT, and was very much responsible for its problems back then. ;)

If we compare the numbers, there is no doubt that Cache is the strongest outfit. That is probably why its distribution yield is the lowest amongst the three.

AIMS AMP Capital Industrial REIT has emerged from its MI-REIT's days and is a different outfit now with much stronger numbers and two strong sponsors. However, it probably suffers from its historical baggage even today.

mark said...

i bought just 8 lots for 'fun' during CR. So I am entitled to 1 lot post rights. I was hoping to round off to 10 lots hahahaahah so i applied 1 lot excess.

When i bought during CR i bought the amount specifically so i dont get any odd lots.

AK71 said...

Hi mark,

Next time, you might want to make it in such a way that you would end up with odd lots. Then, you would have priority when it comes to excess rights. ;)

mark said...

nooo i rather not deal with odd lots. i rather have 9 lots now, than to have something like 8.73 or something. very messy.

however the case is different if say, i have 8.73 post rights and i apply excess rights to round up to 10 lots, and i get all of it. end of the day due to the 1 for 8 entitlement, i wouldnt 'play' a lot with the numbers. get whatever i can and if i see people dumping their entitled lots on the market driving the price down i may consider buying from the market direct.

AK71 said...

Hi mark,

Haha.. Whatever makes you happy. ;)

Money is only money. :)

mark said...

My thought right now - Handle small, aim big. :P

la papillion said...

Hi AK,

This strange exercise of granting odd lots is baffling...

Perhaps holders are used to such things, since they are opt for scrip dividend instead of cash payment.

CIT had been very good to me, but I don't own any of it now :)

AK71 said...

Hi Mark,

Really profound! ;)

AK71 said...

Hi LP,

Consider re-investing in a REIT that has been good to you, perhaps? ;p

Paul said...

AK71, your theory of 'smaller holders do get slightly more' getting more is nonsense. I dun think there is no pattern to suggest such an allocation.

But I'm beginning to see some pattern. From all those who posted here and from HWZ forum.

Those with odd lots of X125 in entitlement seems to have your odd lot rounded up + an excess lot allocated like OT83 and you.

Those with odd lots of X500 (like me and many others) ended up with our odd lot rounded up with no excess.

But the pattern does not fit all cases though. A chap with 2125 entitles rights end up with total 3500 units allocated.

AK71 said...

Hi Paul,

I did say this in reply to Mark's initial comment: "my suspicion that smaller unitholders are given more excess rights after OT83's comments is unfounded now".

Thanks for sharing your findings and for reminding me that my initial idea was "nonsense". ;)

Paul said...

Oops.. haha.. too harsh in my choice of words? Glad you are not offended. :)

Actually I'm sure there must a formula to determine how many excess lot to give those who applied. And this would have already being programmed to arrive at the final figure for all unitholders.

For 2010 AR, there are 8000+ unitholders, if 75% applies for the rights issue, that's 6000+ application to process. Inconceivable for it to be done manually.

So there's definitely a logic to it. Alas it impossible to know without more data.

AK71 said...

Hi Paul,

No worries. I am usually an easy going person and willing to give people the benefit of the doubt although I have some fiery days too. ;)

I spoke with a friend who was entitled to 125 rights more than me and he did not receive any excess rights at all!

Not gonna try to figure this out. Definitely not worth my time. ;p

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