Cache Logistics Trust (CACHE) announced that it has entered into a sale and purchase agreement to acquire a distribution warehouse facility in Adelaide, Australia. The purchase consideration is A$57.3m (~S$57.4m), and is expected to generate a NPI yield of ~8.9% in the first year. This transaction will be funded partially by debt and partially by proceeds raised from a recent private placement exercise.

The asset sits on freehold land, has a gross lettable area of 58,795 sqm and comprises four single-storey warehouses, a cold store and freezer warehouse and an administrative office block. Upon completion of the acquisition, the property will be fully master-leased to Metcash Trading Ltd on a triple net lease structure, with an annual rental escalation pegged to the CPI (rent not to fall at any review). We maintain HOLD but will review our S$1.00 fair value on CACHE.

Source: OCBC Research - 16 Nov 2015