CACHE LOGISTICS TRUST (SGX:K2LU)
Cache Logistics Trust - 1Q19 DPU Of SGD0.015, +0.4% Y-o-y
- CACHE LOGISTICS TRUST (SGX:K2LU) posted a 1Q19 DPU of SGD0.015, +0.4% y-o-y. DPU for the quarter included a capital distribution of SGD0.2m received from Australia. The results were slightly ahead, with DPU accounting for 26% of our full-year forecast.
- Gross revenue and NPI for the quarter rose 6%/4% y-o-y largely driven by new acquisitions of logistics properties in Australia.
- Operating expenses were higher by 15% y-o-y due to higher property tax, utilities and maintenance expenses as a result of the conversion from master lease to a multi-tenancy lease structure at CWT Commodity Hub.
COMMENTS
- Key takeaway was the positive resolution of tax treatment of rental top-up sum of SGD8.2m, received from the resolution of 51 Alps Avenue (51AA) leases. Inland Revenue Authority of Singapore (IRAS) has confirmed that ~SGD7.4m of the top-up income qualifies for tax transparency. Subject to final adjustments, Cache Logistics Trust expects to distribute SGD2.9m of the rental top-up in 2Q19 with balance funds (net of expenses) progressively distributed over the remaining lease term (until Aug 2021).
- This upside is not factored in our DPU estimates and is likely to boost our FY19F estimates by 5%. We will make adjustments post discussion with management.
- Overall portfolio occupancy dipped slightly by 0.2ppts q-o-q to 94.8%. With regards to concerns on CWT’s master leases, Cache Logistics Trust has earlier noted that it has been steadily reducing its reliance on CWT over the years (currently 16.5% of NPI) and is confident of maintaining end occupancy in the event of a potential default by the master tenant.
- During the quarter, CWT also announced the acquisition of 182-198 Maidstone Street in Altona, Victoria. The single-storey logistics warehouse and office facility was acquired at a purchase consideration of AUD41.2m, with an initial property yield of 6.8%. The yield accretive transaction is expected to be completed by end-Apr 2019.
- Overall, we expect rents for the SG logistics sector to bottom by end-2019, with recovery expected in 2020, while the outlook for the Australian logistics market remains stable.
Singapore Research
RHB Securities Research
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2019-04-26
SGX Stock
Analyst Report
0.810
SAME
0.810
