Cache Logistics Trust (SGX: K2LU) is a REIT that focuses on logistics properties. It currently has 28 logistics warehouse properties in its portfolio that are located in Singapore, Australia, and China.
There are two things about the REIT that investors may want to know about right now: Its latest financial performance and valuation.
Here’s a table showing a condensed income statement from Cache Logistics Trust for the first quarter of 2018:
Source: Cache Logistics Trust 2018 first quarter earnings update
We can see that Cache Logistics Trust had a mixed quarter. Although gross revenue and net property income both showed healthy growth, the REIT’s distribution per unit (DPU) declined by over 12% year-on-year.
Cache Logistics Trust attributed its gross revenue and net property income growth to higher contributions from a nine-property portfolio that it acquired in Australia on February 2018, higher revenue from its 51 Alps Ave property, as well as higher revenue from several of its Singapore properties. Meanwhile, the decline in DPU was largely due to an increase in the REIT’s unit count due t a September 2017 rights issue.
As of 31 March 2018, the REIT had a gearing ratio of 38.5% (which is getting a little close to the regulatory ceiling of 45%), and its occupancy rate stood at 97.3%.
There are two useful valuation metrics for assessing REITs. They are the price-to-book (PB) ratio, and the distribution yield.
The table below shows Cache Logistics Trust’s PB ratio and distribution yield. It also shows the respective averages for the two valuation metrics for the 42 REITs that are in Singapore’s stock market.
Source: SGX Stock Facts
We can see that Cache Logistic Trust’s PB ratio is nearly identical to the market average. But, it has a much more attractive distribution yield.
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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.