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2 Singapore REITS That Have Delivered Mixed Performances Recently

It’s earnings season again.

Today we’re looking at two real estate investment trusts (REITs) that have recently delivered mixed financial results. We’ll start with Cache Logistics Trust (SGX: K2LU).

As a quick background, Cache Logistics Trust is a real estate investment trust that focuses on logistics properties. It currently has 26 logistics warehouse properties in its portfolio located in Singapore, Australia, and China.

In the quarter ended 31 December 2018, gross revenue grew 4.8% to S$31.0 million, while net property income fell by 0.6% to S$23.4 million. Similarly, the REIT’s distribution per unit (DPU) was down by 5.9% year on year to 1.502 Singapore cents, mainly due to lower income for distribution and higher numbers of share in issue.

Daniel Cerf, chief executive of the manager, commented:

“FY18 has been a milestone year. During the year, ARA took full control of the Manager and increased its stake substantially to become the single largest Unitholder in Cache. This significant development demonstrates ARA’s confidence and strong support in Cache, and we will continue to capitalise on ARA’s established foothold to grow the REIT.”

Our portfolio rebalancing and growth strategy is also in full swing. During the year, we acquired a nine-property warehouse portfolio in Australia for approximately A$178 million and divested two properties, Hi-Speed Logistics Centre in Singapore and Jinshan Chemical Warehouse in China. Operating performance wise, we maintained a strong committed portfolio occupancy at 95% and successfully secured some 1.3 million square feet of leases in FY18. All of these achievements are on the back of our prudent capital management efforts, where we maintained our aggregate leverage ratio at a comfortable 36.2% with an extended debt expiry profile of 3.9 years and a Singapore portfolio that is entirely unencumbered.”

As of 31 December 2018, the REIT’s gearing stood at 36.2%, and its committed occupancy rate stood at 95.0%.

The next REIT on the list is AIMS AMP Capital Industrial REIT (SGX: O5RU), or AACIR.

As a quick introduction, AA REIT is a REIT that focuses primarily on industrial properties. It has 25 properties in Singapore and a 49% stake in an Australia property.

Koh Wee Lih, chief executive of the Manager, commented on the results:

“While the operating environment remains challenging, there are market expectations of a gradual recovery in the industrial market in the coming years. Against this backdrop, we remain steadfast in our strategy to build a high quality and resilient portfolio. We are committed to deliver long-term sustainable returns for our Unitholders through our focus on prudent capital management and disciplined evaluation of opportunities.”

For the quarter ended 31 December 2018, AA REIT reported that gross revenue grew 3.3% year on year to S$29.8 million, while net property income improved by 1.1% year on year to S$19.4 million.

The higher NPI was due to maiden rental contributions from 51 Marsiling Road and 8 Tuas Avenue 20. Yet, the REIT’s distribution per unit (DPU) was down by 4.6% year on year to 2.50 Singapore cents.

As of 31 December 2018, the REIT’s gearing stood at 33.5%, while its committed occupancy rate stood at 93.9% at end of the quarter.

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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.