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

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

The REIT recently reported its financial results for the third quarter ended 30 September 2017. Here, I would like to share with you three things from its results presentation.

Results summary

Source: Cache Logistic FY17 Q3 Results Presentation

Above is a quick summary of the latest quarterly performance.

Gross revenue and net property income (NPI) were weaker year-on-year mainly due to divestment of Cache Changi Districentre 3 and lower income from 51 Alps Ave due to the holding arrangement in place, partially offset by higher contributions from DHL Supply Chain Advanced Regional Centre, Cache Cold Centre and the Australia portfolio.

The lower distribution per unit was due to lower NPI and the impact of a rights issue.

Portfolio lease profile

Source: Cache Logistic FY17 Q3 Results Presentation

As at 30 September 2017, Cache’s portfolio weighted average lease to expiry was 3.3 years.

One positive from its lease expiry profile is the staggered expiry profile for the next few years, thus avoiding concentration of lease renewals in a particular year.

Singapore demand and supply outlook  

Source: Cache Logistic FY17 Q3 Results Presentation

From the above, we can see that Singapore’s warehouse vacancy rate (represented by the purple line) is close to an all-time high for the past 10 years.

As of the end of the second quarter of 2017, the vacancy rate stood at 11.9%. The high vacancy rate might put significant pressure on Cache’s operations going forward.

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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 Lawrence Nga doesn’t own shares in any companies mentioned.