Singapore Cambridge REIT to tout sharia compliance

HONG KONG, July 10 (Reuters) - Singapore's Cambridge Industrial Trust (CMIT.SI: Quote, Profile, Research) expects to declare itself "sharia compliant" early next week, sources familiar with the matter told Reuters, in an effort to draw investment from the Middle East. The property trust has asked the Islamic Bank of Asia to conduct due diligence, and an initial report has shown that few of its 43 assets were not in line with sharia principles.

One of the sources said the bank's sharia board was due to meet in Kuwait over the weekend and would probably give the go-ahead for the trust to announce it is sharia compliant.

New investors have been lined up to buy stakes in the trust following the move, the source said.

A manager of Cambridge Industrial Trust declined to comment on the matter.

Asia's once-hot real estate investment trust (REIT) markets have slumped in the last year as the global credit crunch raised expectations that debt refinancing would be difficult and expensive.

Singapore-listed REITs FTFSTAS8737, with a market capitalisation of $19 billion, have fallen 35 percent since a peak a year ago and are now yielding on average 6 percent against 2008 dividend forecasts.

Units in Cambridge have also fallen 35 percent since a peak in late June 2007, and are down 11 percent this year.

Units in the trust were trading at S$0.63 on Thursday afternoon, down 1.56 percent on the day.

In a note to clients on July 9, UBS analyst Alastair Gillespie said "potential rebranding of Cambridge could bring the price closer" to the trust's net asset value of S$0.76 per unit. (Reporting by Dominic Whiting; editing by Anne Marie Roantree)