Cache Logistics Trust’s (CACHE) gross revenue grew 6.2% YoY to S$30.8m while NPI grew 4.0% YoY to S$23.8m, mainly due to the contributions from the nine Australian assets acquired in Feb 2018, as well as the conversion of CWT Commodity Hub from master lease to multitenanted.

Distributable amount to unitholders increased 1.2% YoY to S$16.3m. DPU grew 0.4% YoY to 1.513 S cents or 27.5% of our initial full-year forecast, which we consider above expectations. A positive rental reversion of 1.3% was recorded in 1Q19.

Separately, we note that the REIT manager has announced that S$7.4m out of S$8.2m received as part of the resolution of 51 Alps Avenue has qualified for tax transparency.

The REIT manager estimates that ~S$2.9m of the S$7.4m will be distributed along with 2Q19 distributions – though this is an estimate and is subject to adjustments.

We place our Hold rating and fair value of S$0.70 under review.

Source: OCBC Research - 25 Apr 2019