Cache Logistics Trust Financial Results Ending 31 Mar 2017

“Our focus in FY2017 is on improving operating performance in the Singapore portfolio wherever possible in view of the acute oversupply in the market and industry headwinds. As we have articulated to investors, we intend to continue with our portfolio rebalancing and growth strategy to grow and diversify our revenue contributions outside of Singapore. We are proud of our presence in Australia which contributes approximately 15.0% and 22.2% of gross revenue and gross floor area currently.”

Mr Daniel Cerf, Chief Executive Officer

  • 1.8 cents (1Q 2017)

Cache reports Distributable Income of S$16.2 million in 1Q FY2017

Performance Highlights:

  • Maintained strong portfolio committed occupancy which increased to 97.2% from 96.4%
  • Completed the divestment of Cache Changi Districentre 3 and acquisition of the Spotlight warehouse in Laverton North, Victoria, Australia
  • Manager remains focused on portfolio rebalancing and growth strategy going forward

 

ARA-CWT Trust Management (Cache) Limited, the manager (the “Manager”) of Cache Logistics Trust (“Cache”), announced today a DPU of 1.800 Singapore cents for the financial year ended 31 March 2017 (“1Q FY2017”).

1Q FY2017 gross revenue fell marginally by 2.9% year-on-year (“y-o-y”) to S$27.1 million due to a lower revenue contribution from 51 Alps Ave and Cache Changi Districentre 3 which was divested in January 2017, partly offset by revenue contribution from DHL Supply Chain Advanced Regional Centre and the Australian portfolio, including the latest acquisition of the Spotlight warehouse located in Laverton North, Victoria, Australia. Correspondingly, the 1Q FY2017 NPI fell by 5.8% y-o-y to S$20.8 million due to a lower gross revenue and higher property expenses associated with more multi- tenanted properties. Compared to the preceding quarter (“4Q FY2016”), gross revenue and NPI fell by a lower 0.8% and 2.6% respectively.

Income Available for Distribution for the quarter ended 31 March 2017 fell by 11.0% y-o-y to S$16.2 million due to a lower income from operations as well as a lower capital distribution from the sale proceeds of Kim Heng Warehouse. Compared to 4Q FY2016, the Income Available for Distribution reported a lower drop of 2.5%. Compared to 4Q FY2016, 1Q FY2017 DPU fell 2.7% to 1.800 cents.

Mr Daniel Cerf, Chief Executive Officer of the Manager said: “Our focus in FY2017 is on improving operating performance in the Singapore portfolio wherever possible in view of the acute oversupply in the market and industry headwinds. As we have articulated to investors, we intend to continue with our portfolio rebalancing and growth strategy to grow and diversify our revenue contributions outside of Singapore. We are proud of our presence in Australia which contributes approximately 15.0% and 22.2% of gross revenue and gross floor area currently.”

 

Portfolio Rebalancing and Growth Strategy

In March 2017, the Manager completed the acquisition of a single-storey warehouse with ancillary office space located in Laverton North, a suburb of Melbourne, Victoria, Australia currently occupied by Spotlight with a remaining lease tenure of 4.2 years2. The A$22.25 million acquisition was funded by the proceeds received from the divestment of Cache Changi Districentre 3 (“DC3”) which was completed in January 2017. The divestment of DC3 and the acquisition of the Spotlight warehouse in Melbourne is part of the Manager’s portfolio rebalancing and growth strategy which seeks to recycle capital into higher-performing assets.

 

Update on Operating Performance and Capital Management

Cache’s portfolio committed occupancy improved from 96.4% as at 31 December 2016 to 97.2% as at 31 March 2017. The portfolio weighted average lease to expiry (“WALE”) was approximately 3.6 years3 with only 4.7%1 of the portfolio’s leases due for renewal in FY2017. Approximately 80,000 square feet of leases were signed in 1Q FY2017, of which more than half were new leases.

On capital management, the average all-in cost of financing in 1Q FY2017 was 3.47%, down slightly from 3.52% in 4Q FY2016. 1Q FY2017 net financing cost was S$4.6 million, 4.2% lower than the same period a year ago, due to cost savings from a refinancing exercise undertaken in November 2016. Approximately 70.8% of the Singapore-dollar borrowings and 50.0% of the onshore Australian- dollar borrowings are hedged into fixed rates. Approximately 94.9% of Cache’s distributable income has been hedged into or was derived in Singapore dollars, representing minimal exposure to foreign currency risk. As at 31 March 2017, the aggregate leverage was 43.1%.

 

Outlook

Going forward, the Manager remains focused on improving the operating performance for the Singapore portfolio in view of the challenging operating environment and imbalance in demand and supply of industrial space. In Australia where Cache currently owns seven logistics warehouses, the local economy continues to grow moderately. Low interest rates and a favourable AUD/SGD exchange rate since 2013 continue to support domestic demand and external trade. Demand for industrial prime assets in Sydney, Melbourne, and Brisbane continue to be driven by population growth, new investment in development and infrastructure projects, labour market improvements, a low interest rate environment and improving GDP growth.

 

Distribution to Unitholders

Cache will pay a distribution of 1.800 cents per unit on 29 May 2017 for the period from 1 January 2017 to 31 March 2017. The books closure date is on 28 April 2017.

 

Attachments

 

IMPORTANT NOTICE

The value of units in Cache (“Units”) and the income derived from them, if any, may fall or rise. Units are not obligations of, deposits in, or guaranteed by, ARA-CWT Trust Management (Cache) Limited (as the manager of Cache) (the “Manager”) or any of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested.

Investors should note that they will have no right to request the Manager to redeem or purchase their Units for so long as the Units are listed on Singapore Exchange Securities Trading Limited (the “SGX- ST”). It is intended that holders of Units may only deal in their Units through trading on the SGX-ST. The listing of the Units on the SGX-ST does not guarantee a liquid market for the Units.

The past performance of Cache is not necessarily indicative of the future performance of Cache.

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