10 Quick Things Investors Should Know About Cache Logistics Trust’s Latest Results

In late April, Cache Logistics Trust (SGX: K2LU) released its 2018 first quarter earnings update. As a quick introduction, Cache Logistics Trust is a REIT that focuses on logistics properties. It currently has 28 logistics warehouse properties in its portfolio which are located in Singapore, Australia, and China.

Here are 10 highlights from Cache Logistics Trust’s latest results:

1. Gross revenue for the reporting quarter grew 7.3% to S$29.0 million while net property income improved by 10.0% to S$22.9 million.

2. However, the REIT’s distribution per unit (DPU) was down by 12.5% year-on-year to 1.507 cents, partly due to an increase in the unit count from a rights issue and the absence of capital distribution in the reporting quarter.

3. Based on Cache Logistics Trust’s annualised DPU of 6.028 Singapore cents and its closing unit price of S$0.805 as of 9 May 2018, the REIT has an annualised distribution yield of 7.5%.

4. As of 31 March 2018, the REIT’s gearing stood at 38.5%, which is a little close to the regulatory ceiling of 45%.

5. The REIT’s portfolio had a committed occupancy rate of 97.3% at the end of the reporting quarter.

6. The weighted average lease expiry (by gross rental income) was at 3.3 years as of 31 March 2018. 52.2% of Cache Logistics Trust’s leases will expire between 2018 and 2020, 23.3% will expire in 2021 and 2022, and the rest will expire from 2023 onward.

7. In 2018’s first quarter, Singapore accounted for 79% of Cache Logistics Trust’s gross revenue. Australia was in second place with 20%, and China accounted for the remaining 1%.

8. There are a total of 14 properties that Cache Logistics Trust has the right of first refusal (ROFR) on. These properties belong to the REIT’s sponsor, CWT Pte Limited, which was acquired by the Hong Kong-listed CWT International Limited (previously, HNA Holding Group) in late 2017.

9. In the first quarter of 2018, Cache Logistics Trust acquired nine properties in Australia for A$177.6 million. The REIT also announced the proposed divestment of Hi-Speed Logistic Centre at 40 Alps Ave Singapore for S$73.8 million.

10. Here are the comments from the REIT on its outlook:

“Singapore warehouse rents fell on average 1.0% quarter-on-quarter (QoQ) and 5.7% on a year-on-year basis and warehouse occupancy improved 1.6 percentage points QoQ to 89.1%7. According to Colliers International, stronger leasing demand in tandem with growth in manufacturing GDP and export volumes, alongside an easing supply pipeline, should stabilise rents in 2018.

The Reserve Bank of Australia kept the cash rate unchanged in April 2018 at 1.5%. The Australian economy grew by 2.4% in 2017. The Bank expects faster growth in 2018 as business conditions are positive, non-mining business investment is increasing and higher levels of public infrastructure investment are also supporting the economy. Despite the temporary weakness in exports at the end of 2017, stronger growth in exports is expected this year.”

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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.