Cache Logistics Trust

Uobkayhian on 22 Jan 2014

FY14F DPU Yld (%): 7.5
FY15F DPU Yld (%): 8.0

Results in line with expectations. Cache Logistics Trust (Cache) reported 4Q13
distributable income of S$16.6m (+9.6% yoy, +0.6% qoq), or a DPU of 2.137 cents (-
0.8% yoy, +0.5% qoq). 2013 DPU of 8.644 cents is in line with our expectations,
accounting for 99.4% of our estimate.

Watch for double-digit rental reversions in 2015. About 34% of leases are due in 2015,
the majority of which were signed in 2010 during the IPO. While annual rents under the
master leases have been growing at an annual 1.5-2.0% p.a. over the four years since
listing, market rents for logistic facilities have risen 22% since 2Q10. We estimate the
IPO portfolio could see double-digit rental reversions of 10-12% in 2015, providing an
organic growth catalyst.

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