Healthy results At Cache Logistics Trust

cache under CWT CACHE Logistics Trust (SGX: K2LU), “CACHE”, reported a 2Q13 Distribution per Unit or “DPU” of 2.147 cents, up 8.4% year on year. This is in line with a 16% rise in its gross revenue and 19.8% for its distributable income.

CACHE invests in income-producing real estate used for logistics purposes in Asia-Pacific, as well as real estate-related assets. Its portfolio consists of 12 logistics warehouses located in Singapore and 1 in China, Shanghai, valued at estimated S$1.03 billion and measuring over 5.1 million square feet.

The portfolio assets remained 100% occupied with a healthy weighted average lease to expiry of 3.7 years. In addition, CACHE has a strong tenant mix with over 85% of the Gross Floor Area (you can call it warehouse space) taken up by Multinational companies and government entities.

CACHE is also prudent in managing its debt. CACHE currently has an aggregate leverage of 29.2%, one of the lowest among industrial REITs in Singapore. With an all-in financing cost of 3.48% and no debt refinancing required till 2015, CACHE can have ample flexibility and firepower to pursue its growth opportunities.

Commenting on the performance of CACHE, Mr. Daniel Cerf, CEO of the Manager said, “Precise Two, our latest acquisition which closed in April, provided a full quarter’s rental contribution. We are pleased to continue to be an attractive investment for our stable, predictable cash flows given that the portfolio is fully occupied and there is no renewal risk for this year. The Manager will continue to pursue growth via acquisitions and organically via potential redevelopment opportunities.”

Without any renewal risk in the remaining Year 2013, CACHE expects to provide high predictability in its cash flow and distributions. CACHE carries on its pursuit to acquire yield-accretive assets across its key markets as well as to grow organically with annual rental escalations.

As of 30 June 2013, CACHE’s NAV stands at S$0.96 after adjusting for distribution payout to unit-holders. On an annualised basis, the DPU works out to a yield of 6.9% based on the closing price of $1.24.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.   Motley Fool Singapore contributor James Yeo doesn’t own shares in any of the companies mentioned.