UOBKayhian on 24 Apr 2014
First BTS project for Cache, with the project jointly managed with sponsor CWT. When
completed, the S$124m BTS ramp-up warehouse for DHL will increase Cache’s total
deposited properties by 8.6% to S$1.17b, and increase the Weighted Average Lease
Expiry (WALE) to 4.1 years from 3.1 years currently. The deal is DPU accretive with 2%
accretion to DPU in 2016, as the BTS development is larger than our original estimated
acquisition.
Cache renewed its master lease at Kim Heng Warehouse with its existing tenant, Kim
Heng Tubulars Pte. Ltd., for another two years. Positive rental reversions to drive
organic growth master-leases are coming due in 2015 (34% of portfolio). We estimate
that the IPO portfolio could see double-digit rental reversions of 10-12% in 2015.
Maintain BUY with an unchanged target of S$1.31 based on DDM.
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