Cambridge Industrial Trust - Why did its COO and CFO resign a day after announcing earnings?

Friday, 29 January 2016 - Cambridge Industrial Trust has announced it has appointed former Soilbuild Business REIT CEO Shane Hagan as its new Chief Operating Officer and Chief Financial Officer, following the resignation of David Graham Mason a day after the Trust announced its Q4 earnings.

Citing "personal reasons", Mr Mason resigned with immediate effect on January 16.

At the time of the announcement, the company said he would continue to be an advisor to the Trust in order to facilitate a smooth transition until April.

It was not disclosed whether Mr Hagan's immediate appointment would change that.

In this report we ask the questions about Mr Mason's sudden adieu from the Trust.

We also wonder if Mr Mason served notice before resigning.

Investor Central. Asian insights for global investors. We ask the tough questions of Asian companies to which global investors need answers.

Question

1. Why has it dropped plans to convert four of its single-tenanted properties to multi-tenancy?

According to its Q3 earnings report on October 22 last year (page 28), 16.4% of its leases by total rental revenue (represented by nine single-tenanted buildings) were due for renewal by September 30 this year.

Of the nine single-tenanted buildings, it had planned to convert five properties to multi-tenancy, renew or enter into new leases for three properties, and redevelop one property.

However, the Trust seems to have changed its plans during Q4.

According to page 27 of its Q4 earnings report, 13% of its leases by total rental revenue (represented by eight single-tenanted buildings) are due for renewal by December 31.

Of the eight single-tenanted buildings, it plans to renew or enter into new leases for four properties, divest two properties, convert one property to multi-tenancy and redevelop one property.

In other words, the Trust seems to have dropped the plan to convert four of its single-tenanted properties to multi-tenancy.

Rather, it plans to divest two of those properties now.

Therefore that makes us wonder what made it change the plans during Q4.

Is the Trust not keen on converting most of its single-tenanted buildings to multi-tenancy?

Question

2. Which are the two of its investment properties that it is looking to sell this year?

The two properties are worth S$40.6 mln.

However, we couldn't spot which those properties Are, and why it chose them for divestment?

(Read the full story to get all 8 questions)

We have invited the Trust (elena.arabadjieva@cambridgeitm.com) to an on-camera interview, and/or to reply to our questions in writing.

At the time of publication we have not received a reply (which is why you are seeing this message).

We will update this report if we do.

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