MENU

3 Things Investors Should Know From Cache Logistics Trust’s Latest 2016 Results

Credit: Axisadman

Cache Logistics Trust (SGX: K2LU) is a real estate investment trust that focuses on logistics properties. It currently has 19 logistics warehouse properties in its portfolio which are located in established logistics clusters in Singapore, Australia, and China.

In late January, the REIT reported its 2016 full year results. Let’s look at three useful pieces of information from the announcement:

1. The overall result

The following is a table showing some important numbers from Cache Logistics Trust’s income statement for 2016 and 2015:

Cache Logistics Trust income statement 2016
Source: Cache Logistics Trust 2016 full year earnings release

In all, it was a mixed performance from the REIT as it delivered growth in gross revenue and net property income, but a decline in distribution per unit (DPU).

Cache Logistics Trust enjoyed higher gross revenue and net property income due to rental contributions from newly-acquired properties. Meanwhile, its DPU had fallen because of the absence of a divestment gain and an increase in its unit count.

2. Property portfolio statistics

The table below shows various characteristics of Cache Logistics Trust’s property portfolio:

Cache Logistics Trust property portfolio characteristic
Source: Cache Logistics Trust 2016 full year earnings presentation

A few numbers from the table captured my attention.

Firstly, the REIT’s portfolio committed occupancy rate at end-2016 is 96.4%. This is higher compared to end-2015, when the self-same figure was at 94.9%.

Secondly, the weighted average lease to expiry is down from 4.4 years in December 2015 to 3.9 years.

Thirdly, the rental escalations of 1% to 4% that are built into Cache Logistics Trust’s master leases mean that investors can expect revenue from the REIT’s existing tenants to grow over time.

3. Outlook for 2017

As investors, we rely on many tools, including management’s forecasts, to help us gain insight on what to expect for the near to long term performance of our investments’ business.

With regard to Cache Logistics Trust, this is what the REIT said about its future in the 2016 full year earnings release:

“The Manager remains focused on maintaining high occupancy in view of the industry oversupply and anticipated increase in new warehouse supply in Singapore.

By way of the Manager’s portfolio rebalancing strategy to replace lower-performing assets with those with more sustainable earnings, efforts continue to expand Cache’s presence in Australia where it currently owns a portfolio of six freehold logistics warehouses with a longer WALE of 6.1 years.

The Manager will continue to drive long term sustainable growth through its strategy of proactive lease management, portfolio rebalancing and prudent capital management.”

If you like what you've seen, you can get even more investing insights and analyses from The Motley Fool's weekly investing newsletter Take Stock Singapore. It's FREE, so do check it out here.

Also, like us on Facebook to follow our latest news and articles. The Motley Fool's purpose is to help the world invest, better.

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