CLT – BT

Cache’s Q2 DPU surpasses forecast

Logistics Reit clocks 7% q-o-q rise in DPU to 2.086 cents

Distributable income for the second quarter came in 7.1 per cent higher at $13.3 million, compared with Q1’s $12.4 million, and also beat the Reit’s earlier Q2 projection of $12.4 million by 7.4 per cent.

On the back of upward rental adjustments across the portfolio and contributions from new acquisitions, Cache’s net property income (NPI) for Q2 surpassed forecasts by 6 per cent, coming to $15.5 million. Quarter-on-quarter, NPI also improved by more than 7 per cent, exceeding Q1’s NPI of $14.4 million.

Combining the first two quarters, Cache outperformed its first half (1H2011) distributable income and NPI forecasts by 3.8 per cent and 2.5 per cent, with numbers coming in at $25.7 million and $29.9 million respectively.

In response to Cache’s growth plans in the local logistics space, Daniel Cerf, chief executive officer of ARA-CWT Trust Management said in an interview with BT yesterday: ‘This is our backyard, we will continue to grow here (Singapore) as much as we can.’

However the industry has been getting rather ‘crowded’ of late, making it increasingly difficult to acquire ideal logistics properties.

The logistics Reit recently completed the acquisition of three new properties, bringing its logistics portfolio to a total of nine high quality logistics warehouses located in the Asia-Pacific region, amounting to a total portfolio value of $805.1 million.

‘We are pleased with our performance and the fact we have exceeded the $800 million mark in assets under management. We will continue to pursue growth from within the portfolio as well as through external growth by way of acquisitions that are conducive to the portfolio,’ commented Mr Cerf in relation to Cache’s portfolio.

As at end-June, all of the warehouses in Cache’s portfolio are 100 per cent occupied, with tenants on triple-net master leases and multi-tenancy leases.

Gearing also remains at a healthy level of 29.1 per cent with about $231.2 million in borrowings as at end-June.

When asked whether investors can expect Cache’s DPU to continue on an uptrend, Mr Cerf declined comment, though he did hint that the Reit was ‘on track’ in that aspect.

Mr Cerf shared with BT that to him, driving Cache’s stock price is not as much of an issue as ensuring healthy distributions. After all, he said, ‘I know if I’m doing the right thing, people will do the right thing and buy the stock.’

Cache’s stock closed half a cent lower at 97.5 cents yesterday.