Cache Logistics Trust

Re: Cache Logistics Trust

Postby winston » Tue Apr 15, 2014 6:58 pm

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Cache Logistics Trust: Buy S$1.135 CACHE SP
New income stream from DHL
Price Target : 12-Month S$ 1.29 (Prev S$ 1.31)

• Developing a built-to-suit facility for DHL
• Strong earnings visibility from long-term lease with a top-notch client
• Maintain BUY, TP S$1.29

Built to suit facility for DHL. Cache Logistics Trust (Cache) will develop a built-to-suit (BTS facility) for DHL at Tampines LogisPark, a newly established logistics park located in the east of Singapore. The property will comprise two ramp-up warehouse blocks with a combined NLA of 928,000 sqft on a new land site allocated by JTC. The development is expected to cost S$105.1m (before transaction costs of S$18.1m) and is projected to be completed in 2H15. Cache has engaged Precise Development Pte Ltd to construct the property, thus eliminating any development risk for this project.

Strong earnings visibility from a top-notch client. This BTS Facility will further diversify Cache’s earnings base with a stream of recurring revenues from DHL, a strong tenant with superior credit standing. Upon completion, DHL will commit to a long-term lease of 10 years (for 78% of the NLA or block 1) with incremental commitments for the remaining space over 3-5 years. We expect Cache to utilise proceeds from its previous equity fund raising and new debt for this project and estimate a 75% debt/25% equity funding ratio. Based on an initial yield of 6.75%, our estimates are tweaked slightly ( up to -2% for FY14-15, +1% in FY16), as we had previously accounted for a S$100m acquisition in our estimates by end-2014.

Maintain BUY, TP revised to S$1.29. FY14-15F yields are attractive at c.7.6% to 8.0%. With DHL as a key tenant, in the medium term, we see Cache emerging as a stronger REIT, offering better earnings diversity and visibility. Maintain BUY

Source: DBS
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Re: Cache Logistics Trust

Postby winston » Mon Apr 21, 2014 7:59 pm

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1) Developing a built-to-suit facility for DHL
2) Strong earnings visibility from long-term lease with a top-notch client
3) Maintain BUY, TP S$1.29

source: DBS
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Re: Cache Logistics Trust

Postby winston » Thu Apr 24, 2014 7:13 pm

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Cache Logistics Trust (CACHE SP, TP $1.42, BUY) reported a lower than expected set of 1Q14 results after market close.

Revenue of $20.7mil (+8.2% YoY, -0.1%QoQ) and NPI of $19.6mil (+8.2% YoY, flat QoQ) resulted in 1Q14 DPU of 2.14cents (-4.2% YoY, +0.1% QoQ), -4% below our run
rate of 2.24cents. The lower YoY DPU was a result of private placement of 70mil units on 27-Mar-13 (778.5mil total units outstanding).

In its earnings release, Cache announced it has secured a new Build-To-Suit warehouse with DHL, to house its Asia-Pacific HQ at Tampines LogisPark. With development costs of $105.1mil, this deal is expected to be largely debt-financed and is highly yield accretive based on the stated development costs. This site accounts for 19% of
Cache Logistics current portfolio by GFA and is expected to lift earnings by circa 2% on an annualized basis on completion with TOP in 2H15.

Maintain our FY14F DPU estimate of 8.96cents . Cache is currently trading at 7.6% FY14F DPU yield.

Maintain BUY with Target Price of $1.42.

Source: DMG
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Re: Cache Logistics Trust

Postby winston » Thu Apr 24, 2014 7:44 pm

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Cache Logistics Trust: Looking beyond 2014

Cache Logistics Trust (CACHE) delivered 1Q14 DPU of 2.14 S cents, representing a YoY decline of 4.2%. However, this is within expectations as the unit base has risen due to the private placement in Mar 2013.

CACHE’s portfolio continued to exhibit strength, with occupancy holding steady at 100% and weighted average lease to expiry healthy at 2.9 years. During the quarter, CACHE also renewed its master lease at Kim Heng warehouse for another two years. Only 2% of portfolio GFA is now left for renewal in 2014.

As announced last week, CACHE has secured an agreement to develop and lease a build-to-suit (BTS) ramp-up warehouse. In our view, the contract will not only provide CACHE with quality recurring income, enhance its lease expiry profile, but also strengthen its market position in modern ramp-up warehouse in Singapore.

We maintain BUY with unchanged fair value of S$1.25 on CACHE.

Source: OCBC
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Re: Cache Logistics Trust

Postby winston » Thu Apr 24, 2014 7:52 pm

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Cache Logistics Trust (CACHE SP): No surprises in 1Q14 results; HOLD TP SGD1.15

- FY3/14 results in line with our and market expectations.
- Japan portfolio still a drag on top line; aggregate revenue and NPI for the past four quarters fell 17% YoY.
- FY3/14-17E DPU CAGR to be an unexciting 0.3% without concrete growth catalysts.

Maintain SELL with TP of SGD1.00.


source: Kim Eng
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Re: Cache Logistics Trust

Postby winston » Thu Apr 24, 2014 8:12 pm

Cache Logistics Trust

Results within expectations. Cache’s 1Q14 revenue and net property income was within 0.14% and 1.0% of our forecasts, with DPU of 2.14c at 24.4% of our FY14 estimate. The distribution will be paid on 27 May 2014. The respective q-on-q 8.2% and 5.5% increases in NPI and distributable income were from rental contributions from Cache’s 2013 acquisitions, and built-in rental escalations on master-leased properties.

Aggregate leverage of 29.1% to increase to 34.8% after DHL development. Cache’s aggregate leverage stood at 29.1% for 1Q14. However, in our 15 April note, we noted that Cache’s aggregate leverage will rise to an estimated 34.8% upon completion of the DHL build-to-suit logistics warehouse in 2H15.

We reiterate our positive view on the development as it lengthens Cache’s weighted average lease expiry from 2.9 years in 1Q14 to 3.9 years, and increases Cache’s GFA by a sizeable 19.3%. Also, although Cache does not have any loans maturing until 2Q15, we note management has indicated they are exploring refinancing options to lengthen the debt maturity profile.

Renewal of Kim Heng Warehouse master lease. We continue to view Cache’s rental prospects positively. The renewal of the Kim Heng Warehouse master lease for another two years is testament to the quality of Cache’s assets.

Attractive yield resilient despite moderating outlook. We expect Cache’s 7.3% yield to remain resilient despite the slight decline in 1Q14 rents in the prime conventional warehouse segment reported by Collierts International, and expectations of downward pressure on occupancy rates and rents from an increase in supply of industrial space.

First, only 2% of Cache’s NLA remains to be renewed in FY14, and it is currently at 100% occupancy.
Second, Cache’s triple-net master leases lock in annual rental escalations of 1.25-2.5%.

We reiterate our DDM-derived TP of $1.41, which offers a 20.5% upside from the last close price of S$1.175.


Source: AmFraser
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Re: Cache Logistics Trust

Postby winston » Sat Apr 26, 2014 9:57 am

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Cache’s portfolio has historically been very stable, mainly due to the master leases undertaken by its sponsors.

However, looking ahead, with 34% of leases due to expire in FY15, there is a risk that some of these upcoming leases may not be renewed by the sponsor. Having said that, we find comfort in management’s confidence that it will continue to achieve high occupancy even if the leases are not renewed.

This confidence is underpinned by the strong geographical positioning of the properties and the costs involved for the tenants to move out, thus significantly limiting the number of choices.

In addition, even though the rental market remains soft at the moment, management is confident of getting positive rental reversions for these upcoming leases if they are not renewed as the underlying rental rate is still below the market spot rent despite an annual step-up rental rate of 1.5-2.5% p.a. since 2010.

According to URA data, the rental rate for warehouses has jumped by c.50% from S$1.50 psf/mth in 1Q10.


Source: CIMB
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