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Cache Logistics Trust Posts Higher Revenue and DPU for 1Q 2019

Yesterday, Cache Logistics Trust (SGX: K2LU) released its 2019 first quarter earnings update. As a quick introduction, Cache Logistics Trust is a REIT that focuses on logistics properties. It currently has 26 logistics warehouse properties in its portfolio which are located in Singapore and Australia.

Here are nine things investors should know about Cache Logistics Trust’s latest results:

  1. Gross revenue for the reporting quarter grew 6.2% to S$30.8 million while net property income improved by 4.0% to S$23.8 million.
  2. The REIT’s distribution per unit (DPU) was up by 0.4% year-on-year to 1.513 cents.
  3. Based on Cache Logistics Trust’s annualised DPU of 6.052 Singapore cents and its unit price of S$0.72 (as of writing), the REIT has a trailing distribution yield of 8.4%.
  4. As of 31 March 2019, the REIT’s gearing stood at 37.4%, which is a safe distance from the regulatory ceiling of 45%.
  5. The REIT’s portfolio had a committed occupancy rate of 94.8% at the end of the quarter.
  6. The weighted average lease expiry (by gross rental income) was at 3.1 years as of 31 March 2019. 77.0% of Cache Logistics Trust’s leases will expire within the next five years while the rest will expire after 2024.
  7. For this quarter, Singapore accounted for 76.4% of Cache Logistics Trust’s gross revenue while Australia accounted for the remaining.
  8. The REIT proposed the acquisition of 182 – 198 Maidstone Street in Altona, Victoria, for a purchase consideration of A$41.2 million and an initial property yield of 6.8%.
  9. Cache Logistic Trust provided the following outlook:

“The overall occupancy rate of the industrial property market in Singapore rose by 0.2% on a q-o-q basis and 0.4% on a y-o-y basis in 4Q 2018 according to JTC statistics. Industrial space prices and rental rates remained largely unchanged. In a report by Colliers International, Singapore’s industrial property market has started to show signs of stabilising at the end of 2018. However, manufacturing growth momentum is expected to experience moderation in 2019 in view of a potential slowdown in China’s domestic economy, trade protectionism and concerns over a trade war.

In Australia, the industrial and logistics economy continues to perform well with major infrastructure projects driving growth in the construction sector, according to CBRE Research. Higher demand for logistics and industrial space is likely to be underpinned by the rise of e-commerce. It is estimated to potentially create new demand for 350,000 sqm of new industrial and logistics space in Australia each year until 2022, where the space will be made up largely of new large-scale distribution centres.

Looking ahead, the Manager remains committed to its proactive asset management strategy to maintain high occupancy and optimise overall returns. As part of its Portfolio Rebalancing and Growth Strategy, the Manager will also continue to prudently seek strategic acquisitions and asset enhancement opportunities to strengthen its portfolio and grow sustainable earnings over time.”

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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.