Cache Logistics Trust’s (CACHE) 4Q15 revenue jumped 16.6% YoY to S$24.0m. This was driven largely by contribution from new acquisitions. However, NPI fell marginally by 1.0% to S$19.2m due to a slight dip in occupancy rates and higher property expenses as some of its master leases were converted to multi-tenanted leases.

Despite a capital distribution of S$2.1m arising from the recent divestment of Kim Heng warehouse, CACHE’s DPU fell 3.4% YoY to 2.074 S cents as a result of a larger unit base from a private placement exercise. For FY15, CACHE’s gross revenue rose 8.3% to S$89.7m, while DPU declined slightly by 0.9% to 8.50 S cents. The latter formed 101.4% of our full-year forecast, which we judge as in-line with our expectations. Looking ahead, CACHE has 12% of its leases (by gross rental income) expiring in 2016. This comprises largely two master leases at Schenker Megahub and Hi-Speed Logistics Centre.

There is currently no indication as to whether the master lessees would be renewing their leases. On a positive note, management secured the master lease renewal at Air Market Logistics Centre. We maintain our HOLD and S$0.90 fair value estimate on CACHE.

Source: OCBC Research - 26 Jan 2016