Property trust recommended buy: broker

Property trust company Col-onial First State Industrial (CIP) is recommended a buy by stockbroker JD Carmichael & Co due to a weaker price on the bourse.

It rates the company as an opportunity for investors to add a quality high yielding investment to their portfolio. However, the situation changes daily, according to Carmichael representative Duncan MacKintosh.

He said the recent merger of CIP with Legal and General Industrial Property Trust has been completed, making CIP the second largest industrial property trust with assets of $424 million.

The proposed purchase of two additional properties has also been completed giving CIP a total portfolio of 24 properties.

“CIP units have since risen seven per cent to close at $1.93, so caution must be exercised,” Mr MacKintosh said.

At previous levels CIP was offering a forecast yield around 9.6 per cent and is trading at a slight premium to net tangible asset (NTA) of 2.22 per cent.This compares favourably to the average yield and premium to NTA of 6.38 per cent and 19.91 per cent respectively for the property trust sector at the end of April.


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