Cache Logistics Trust - Maybank Kim Eng 2019-10-29: Weak As Expected, Recovery Underway

CACHE LOGISTICS TRUST (SGX:K2LU) | SGinvestors.io CACHE LOGISTICS TRUST (SGX:K2LU)

Cache Logistics Trust - Weak As Expected, Recovery Underway


Weak 9M19 in line with Street, offers 8% yield



S’pore contribution lower; firm leasing momentum

  • Cache Logistics Trust's 3Q19 revenue and NPI fell 12.0% y-o-y and 8.3% y-o-y, and was -0.3% q-o-q and +3.3% q-o-q. The performance was mainly due to:
    1. conversion of its Cache Gul LogisCentre master lease into multi-tenancies;
    2. transitory downtime at Commodity Hub; and
    3. expiring leases at Pandan Logistics Hub, Changi DistriCentre 1 and 41-51 Mills Road in Melbourne, Australia.
  • S’pore’s revenues fell 16.8% y-o-y, 2.4% q-o-q but committed occupancy picked up q-o-q from 86.1% to 92.8% as of end-Sep 2019. CWT’s contribution to its gross rental income has fallen further q-o-q from 14.8% to 10.7%, and it now ranks behind DHL (14.3% contribution).
  • Management secured 609k sf in lease commitments during the quarter (7% of total NLA), including 548k in renewals at -11.9% rental reversions, with 1.1% of NLA expiries remaining for FY19.


Australian assets - growth intact

  • Revenue from Australia rose 7.6% y-o-y and 5.6% q-o-q, helped by the AUD41.2m (SGD39.7m) Altona warehouse acquisition (at 6.8% NPI yield). Supply in Australia is tight, against a backdrop of growing demand. Its 3.6-year WALE has supported a 3.2-year portfolio WALE.
  • Aggregate leverage rose from 37.9% to 38.3%, leaving SGD90-220m in debt headroom. We expect interest cost savings as it refinanced AUD72.6m of debt due in 2019-20.
  • Management will remain focused on capital recycling, eyeing freehold assets in Australia and New Zealand.





Chua Su Tye Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2019-10-29
SGX Stock Analyst Report BUY MAINTAIN BUY 0.85 DOWN 0.900



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