Cache Logistics Trust

Re: Cache Logistics Trust

Postby winston » Fri Oct 25, 2013 10:47 am

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Cache LogisticS TRUST

Revenue up 8.4% YoY, Distributable income up 9.6%. Cache Logistics Trust reported growth of 8.4% YoY in its Q313 revenue to S$20.7mil, which was in line with our projections. Meanwhile, distributable income for the quarter was up by 9.6% - approx. 2.2% lower than our forecast.

Factors behind the revenue and distributable income growth include annual rent escalations of 1.25-2.5% and rental contribution from new acquisitions in FY12 and FY13.


Enjoying resilient growth. Cache’s overall portfolio occupancy is maintained at 100%, reflecting the resilient nature of its master leases across the majority of its portfolio assets. Further underscoring its resilience, Cache notably has no renewal risk for the remainder of FY13 and has only 3% of its portfolio by GFA that is due for lease expiry in FY14 (refer to Fig 1).

We also note that lease renewal progress for Jinshan chemical warehouse is well ahead of its June 2014 expiry, reflecting Cache’s commitment to engage in active re-leasing to minimize renewal risks.


Larger influx of warehouse supply not a major concern. A record supply of warehouse space is expected to come on-stream in FY14 and FY15 (refer to Fig 2). We note, however, that the bulk of the upcoming supply includes committed and owner-occupied space as well as non-competing strata-titled and Jurong Island industrial space, thus mitigating competition risks for Cache.


Minimal refinancing risks. Cache’s leverage currently stands at 29.2%, with 70% of its borrowings already hedged into fixed rates through interest rate swaps. We believe both refinancing risk and interest rate risk are negligible for Cache.

Notably, Cache will not be facing any debt refinancing till FY15. In terms of its exposure to rising interest rates, we estimate that a 1% increase in interest rates would lower our projected FY14 DPU by 1.5%.


Maintain BUY on FV S$1.36. Cache declared a DPU of 2.13c in Q313, bringing its YTD DPU to 6.5c. This forms 76.5% of our full-year DPU forecast of 8.5c. As mentioned in an earlier update on 11 Oct 2013, we believe there is greater valuation comfort at current FY13-14 yield levels of 7.1-7.2% and maintain our BUY recommendation on a higher FV of S$1.36.


Source: AmFraser
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Re: Cache Logistics Trust

Postby winston » Fri Oct 25, 2013 11:02 am

Cache Logistics Trust’s 3Q13 results in line.

With minimal renewals in FY14F, Cache offers strong income visibility. Cache is poised for acquisitions, with opportunities coming from overseas markets.

Maintain BUY, TP S$1.33. Yields of close to 7.3%-7.5% are one of the highest amongst peers.


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Re: Cache Logistics Trust

Postby winston » Mon Jan 06, 2014 8:05 pm

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• Industrial REITs face highest downside risk from interest rate hike and possible recalibration of over-inflated property prices, which can drag down NAV.

• Cache has 69% of GFA up for renewal in 2015-2016, making it vulnerable to negative rental reversions.

• Inherent concentration risk on main master lessee, CWT/C&P, which accounts for almost 90% of FY12 gross rental income.

• Valuation: DDM-derived TP of SGD1.05 implies FY14E yield of 7.7% and P/BV of 1.1x (mean P/BV of 1.1x), assuming COE of 7.1% with market risk premium of 5.5% and risk-free rate of 3%.

• Catalysts: Ample warehousing supply in 2013-2017 (pipeline – 22% of available stock). Warehouse rents and capital values likely toppish after a twofold jump in manufacturing bank loans and warehouse physical prices in the past three and four years, respectively. Iskandar Malaysia poses competition in the medium term.

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Re: Cache Logistics Trust

Postby winston » Wed Jan 22, 2014 8:08 pm

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Cache Logistics Trust: As steady as ever

Cache Logistics Trust (CACHE) announced FY13 DPU of 8.644 S cents, up 3.3%. This is in line with our full-year DPU forecast of 8.59 S cents.

For 2014, only 3% of its GFA are due for renewal, thus giving CACHE strong earnings stability.

Management also revealed that CACHE is currently in advanced negotiations with its Sponsor and end-users for the lease renewals coming in 2015, which we view positively in light of the upcoming supply of warehouse space.

On the acquisition front, CACHE shared that Singapore, China and Malaysia continue to be its key markets. In addition, management reiterated that it will seek redevelopment opportunities and built-to-suit projects.

We are keeping our forecasts largely intact pending any development. However, in view of impending Fed tapering, we reduce our fair value to S$1.20 from S$1.30 to reflect higher equity risk premium and risk free rate. But maintain BUY as upside remains compelling.

Source: OCBC
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Re: Cache Logistics Trust

Postby winston » Wed Jan 22, 2014 8:15 pm

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Cache Logistics (CACHE SP, TP SGD1.42, BUY) reported an in-line set of FY13 results yesterday.

Revenues of SGD80.9m (+8.2% YoY, DMG est SGD80.6m) and NPI of SGD76.8m (+7.1% YoY, DMG est SGD77m) gave full year DPU of 8.64cents (-0.8% YoY).

At the analyst briefing yesterday, management remains cautious optimistic on the outlook for the next 12 months for the industrial sector, citing difficulty in finding asset accretive acquisitions within Singapore.

Note that CACHE has 14 ROFR properties from sponsor, totalling 4.7m sqft in GFA (almost equal to current CACHE portfolio of 5.1m sqft), but likely to be driven by sponsor's capex needs.

Maintain our FY14F DPU of 8.96cents (implied 3.7% YoY growth) which gives investors a current yield of 8%.

Maintain BUY with Target Price of SGD1.42.

source; OSK-DMG
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Re: Cache Logistics Trust

Postby winston » Wed Jan 22, 2014 8:32 pm

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Cache Logistics Trust (BUY, S$1.400)

Building a resilient platform for growth. Cache’s full-year results are in line, with FY13 DPU of 8.64c representing 101.4% of our full-year estimate. Driven by built-in rent escalations and the addition of new properties to the portfolio in FY12 and FY13, distributable income is up by 14.1%. In FY13, Cache also clocked in a revaluation gain of S$6.7mil. We note that this is primarily driven by an improved market valuation of CWT Commodity Hub - bearing testament to its asset quality.

We laud Cache’s proactive efforts on the capital management front. Cache’s aggregate leverage currently stands at 29.1%, translating into a comfortable debt headroom of S$98mil (assuming a target leverage ratio of 35%). Notably, Cache does not face any debt refinancing needs till 2015. Meanwhile, all-in financing cost is at 3.48%, of which 70% has been hedged into fixed-rate, and this would considerably mitigate its interest rate risks.

Against the odds. Despite a relatively muted near-term outlook for warehouse rents, we continue to view Cache’s rental prospects positively. Expiring rents in FY15 are estimated to be below market rents and only 3% of Cache’s portfolio is due for renewal in FY14. We are currently factoring in positive rent reversions of approx. 5% in FY15.

Acquisition pace likely to pick up steam. Owing to heightened competition among S-REITs and a tougher regulatory environment, the hunt for yield-accretive assets in Singapore is undeniably proving to be a daunting task. As such, Cache is broadening its acquisition focus to overseas markets such as China and Malaysia. Conservatively, we factor in S$80mil of acquisitions in FY14 at a NPI yield of 7.5%. This raises our FY14 and FY15 DPU by 2.3% and 7.9% respectively.

An attractive yield opportunity. With an annualized yield of 7.7%, Cache ranks highly amongst the industrial S-REITs in terms of distribution yields (average: 7.4%). We note that this also represents a 519 basis point spread over the 10-year Singapore Government Bond yield - a comfortable level in our view.


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Re: Cache Logistics Trust

Postby winston » Wed Jan 22, 2014 8:39 pm

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Cache Logistics Trust (CACHE SP)

4Q13: Compelling Valuations With Growth From Rental Reversions, Asset Enhancements And Acquisitions; Upgrade To BUY.

No surprises as DPU growth slowed along with the pace of acquisitions. However, upcoming double-digit rental reversions, potential asset enhancements and a still
substantial pipeline from the sponsor, coupled with dry powder from private placement proceeds could lead to positive surprises.

Upgrade to BUY with a lower target price of S$1.31 (from S$1.38), based on DDM (RR: 6.9%, terminal: 1.5%).


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Re: Cache Logistics Trust

Postby winston » Wed Jan 22, 2014 8:45 pm

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The wait continues
CACHE SP / CALT.SI | ADD - Maintained | S$1.13 - TP: S$1.33
Mkt.Cap: US$684.60m | Avg.Daily Vol: US$1.01m | Free Float: 88.30%


Cache’s 4Q13 revenue and DPU translate to 25% and 24% of our respective quarterly estimates. Taken together with its 9M earnings, full-year revenue and DPU largely met our expectations, at 98% and 99% of our respective FY13 estimates. With its solid portfolio and no debts due to be refinanced in FY14, we believe Cache will continue to provide stable dividends while we await news of potential acquisitions. We maintain our Add rating with an unchanged DDM-based target price (discount rate: 7.8%) of S$1.33.


Another quarter with strong earnings

Cache Logistic just announced its FY13 results, posting revenue of S$81m (+11.4% yoy) and DPU of 8.64Scts (+3.3% yoy). The higher revenue was mainly due to Two Precise, acquired in February 2013, as well as the built-in rental escalation within the portfolio. 4Q13 revenue grew by 8.2% qoq but DPU fell by 0.8%, mainly as a result of the dilution from the placement of 70m units in April and additional cash in the balance sheet. Occupancy for the quarter continued to remain at a respectable 100% level. Property valuation was also up slightly by S$6.7m, with the cap rate unchanged at 6.5-7%.


Tap on AEI for growth

Looking ahead, with asset prices on the high end, we believe the possibility of acquiring assets within Singapore would continue to remain challenged. As a result, management has highlighted that it will focus on seeking acquisitions in Penang, the Klang Valley and China, and to a lesser preference, Iskandar. With gearing currently at 29.1%, Cache will have debt headroom of S$117m for future acquisitions before gearing reaches 40%.


Maintain Add

We expect Cache’s management to take advantage of the low interest rate environment for early refinancing of the S$187.5m loan due in 2HFY15. In addition, we remain confident that Cache will be able to renew the majority of the 34% of leases that will fall due in FY15, whether through a master lease or underlying tenants before they expire. We maintain our Add rating with an unchanged DDM-based target price of S$1.33.


Source: CIMB
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Re: Cache Logistics Trust

Postby winston » Mon Feb 03, 2014 9:25 am

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Cache Logistics Trust- Post-results feedback session with investors.
(CACHE SP/BUY/S$1.10/Target: S$1.31)
FY14F PE (x): 14.4
FY15F PE (x): 13.5

Positive rental reversions to drive organic growth. Positive reversions are likely for the master-leases coming due in 2015 (34% of portfolio), based on current market rents.

Management was more optimistic on the prospects for higher reversions for properties in the Eastern region of Singapore, where slower growth in new supply will ensure that occupancies will remain high.

We estimate that the IPO portfolio could see double-digit rental reversions of 10-12% in 2015, providing an organic growth catalyst, while annual rents under the master-leases have been growing at 1.5-2.0% p.a. over the four years from listing, with market rents for logistic facilities having risen 22% since 2Q10.

Maintain BUY with target price of S$1.31, based on DDM (required rate of return: 6.9%, terminal growth: 1.5%).

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Re: Cache Logistics Trust

Postby winston » Mon Apr 14, 2014 7:52 pm

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Cache acquires build-to-suit logistic warehouse facility

Cache logistic trust has entered into an agreement to develop a built-to-suit warehouse located at Greenwich Drive, Tampines LogisPark for DHL, for a cost of SGD105.1m.

Upon completion, it will enter into a long-term lease with DHL.

The lease will terminate at the end of the initial 10-year lease term, with an option to renew for three additional five-year terms and a fourth renewal term commencing from the expiry of the third renewal term and expiring one day before the end of the 30-year land lease.

Annual rental escalation apply throughout the initial 10-year lease term. This development will increase Cache’s total deposited property by 8.6% to SGD1.17bn and lengthen the portfolio’s weighted average lease to expiry from 3.1 years to 4.1 years.

Source: OSKDMG
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