ESR-REIT's 70 Seletar Aerospace View (Photo: REITsWeek)ESR-REIT's 70 Seletar Aerospace View (Photo: REITsWeek)

In a move to mitigate against adverse interest rate movements, Cambridge Industrial Trust announced on 19 September that it is refinancing the loan facility granted by National Australia Bank.

The facility, which is being refinanced on the same day of the announcement, extends the Singapore-listed industrial REIT’s weighted average debt expiry to 3.4 years with 88.5% of interest rate exposure fixed.

Upon refinancing, the REIT’s cost of debt is approximately 3.65% per annum on a total outstanding amount of SGD526 million (USD385 million) as at 19 September 2016.

Its portfolio of properties, which is valued in excess of SGD1.4 billion (USD1.03 billion), is now fully unencumbered.

“This refinancing is the latest step in our prudent capital management strategy and testament to our banking partners’ strong support”, said Philip Levinson, CEO of Cambridge Industrial Trust’s manager, who disclosed that the REIT has no major refinancing requirements until the second half of 2018.

“We will have also significantly insulated Cambridge Industrial Trust from adverse interest rate movements for the next 3.2 years, and achieved our goal of a 100% unencumbered portfolio which improves [the REIT’s]capital structure and operational flexibility”, he added.

The refinancing with National Australia Bank is one of several initiatives undertaken by the REIT to manage its capital for FY 2016.

In the earlier part of the year, Cambridge Industrial Trust issued a series of seven-year medium term notes, and established a new unsecured bilateral term loan facility.

These initiatives are testament to the REIT’s ability to access capital from various funding sources despite interest rate volatility, and weakening economic conditions, it said.

Units of Cambridge Industrial Trust finished the trading day about 1% higher from its previous close on the Singapore Exchange to end at SGD0.53.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.