Cache Logistics Trust (CACHE) announced that it will release its 4Q12 results after the market close on 21 Jan 2013. We expect CACHE to meet our 4Q NPI forecast of S$18.5m (+11.1% YoY) and distributable income projection of S$14.7m (+9.5%) comfortably, thanks to the contribution from its newly-acquired Pan Asia Logistics Centre and Pandan Logistics Hub. In the coming year, we believe CACHE’s financial performance will remain sturdy, as it continues to benefit from upward rental adjustments and full-year contribution from its past acquisitions. A few industrial properties from its sponsor’s pipeline assets are also ready for acquisition and may boost its income if CACHE injects any of these properties into its portfolio. We also continue to favour CACHE for its resilient portfolio. While the Singapore Purchasing Managers’ Index (PMI) indicated that the manufacturing sector contracted for the fifth month in Nov, we expect CACHE’s portfolio occupancy to maintain at 100% as the bulk of its leases are based on triple-net master lease structures. Maintain BUY and S$1.30 fair value on CACHE.
Likely to maintain firm performance
Cache Logistics Trust (CACHE) announced that it will release its 4Q12 results after the market close on 21 Jan 2013. We expect CACHE to meet our 4Q NPI forecast of S$18.5m (+11.1% YoY) and distributable income projection of S$14.7m (+9.5%) comfortably, thanks to the contribution from its newly-acquired Pan Asia Logistics Centre and Pandan Logistics Hub. On the DPU level, we anticipate CACHE to maintain its distribution at ~2.1 S cents, not withstanding an enlarged unit base from the private placement in Mar 2012. This translates to robust 10.9% growth in its full-year NPI to S$68.7m and 0.9% growth in DPU to 8.29 S cents.
Acquisition may provide further catalyst
In the coming year, we believe CACHE’s financial performance will remain sturdy, as it continues to benefit from upward rental adjustments and full-year contribution from its past acquisitions. A few industrial properties from its sponsor’s pipeline assets are also ready for acquisition and may boost its income if CACHE injects any of these properties into its portfolio. Based on its last reported financial position, we estimate that CACHE has ~S$42.9m additional debt headroom before it reaches the regulatory aggregate leverage ceiling of 35% (currently at 32.6%). Hence, we believe CACHE may finance any upcoming acquisition using a combination of debt and equity if the transaction size is considerable.
Maintain BUY
We also continue to favour CACHE for its resilient portfolio. While the Singapore Purchasing Managers’ Index (PMI) indicated that the manufacturing sector contracted for the fifth month in Nov, we expect CACHE’s portfolio occupancy to maintain at 100% as the bulk of its leases are based on triple-net master lease structures. Moreover, eight out of 12 of its warehouses have ramp-features, where supply of such space is tight since it requires specialised planning and design specifications to develop. Hence, we expect its portfolio demand to remain strong despite the impending supply (10% of total stock) of warehouse space in 2013. Maintain BUY and S$1.30 fair value.
Cache Logistics Trust (CACHE) announced that it will release its 4Q12 results after the market close on 21 Jan 2013. We expect CACHE to meet our 4Q NPI forecast of S$18.5m (+11.1% YoY) and distributable income projection of S$14.7m (+9.5%) comfortably, thanks to the contribution from its newly-acquired Pan Asia Logistics Centre and Pandan Logistics Hub. On the DPU level, we anticipate CACHE to maintain its distribution at ~2.1 S cents, not withstanding an enlarged unit base from the private placement in Mar 2012. This translates to robust 10.9% growth in its full-year NPI to S$68.7m and 0.9% growth in DPU to 8.29 S cents.
Acquisition may provide further catalyst
In the coming year, we believe CACHE’s financial performance will remain sturdy, as it continues to benefit from upward rental adjustments and full-year contribution from its past acquisitions. A few industrial properties from its sponsor’s pipeline assets are also ready for acquisition and may boost its income if CACHE injects any of these properties into its portfolio. Based on its last reported financial position, we estimate that CACHE has ~S$42.9m additional debt headroom before it reaches the regulatory aggregate leverage ceiling of 35% (currently at 32.6%). Hence, we believe CACHE may finance any upcoming acquisition using a combination of debt and equity if the transaction size is considerable.
Maintain BUY
We also continue to favour CACHE for its resilient portfolio. While the Singapore Purchasing Managers’ Index (PMI) indicated that the manufacturing sector contracted for the fifth month in Nov, we expect CACHE’s portfolio occupancy to maintain at 100% as the bulk of its leases are based on triple-net master lease structures. Moreover, eight out of 12 of its warehouses have ramp-features, where supply of such space is tight since it requires specialised planning and design specifications to develop. Hence, we expect its portfolio demand to remain strong despite the impending supply (10% of total stock) of warehouse space in 2013. Maintain BUY and S$1.30 fair value.
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