2Q18 in line; BUY
2Q18 DPU of SGD1.42cts is in line, at 46% of our FY18E. DPU fell 17.6% YoY from a 13.7% increase in units and lower NPI following the conversion of CWT Commodity Hub into multi-tenancies and divestment of its HiSpeed Logistics Centre property in May. These were partly offset by nine new Australian properties, which lifted Australian revenue contributions from 20% to 23%. Cache has delivered on boosting its Commodity Hub committed occupancy, and we see stronger growth as rents stabilise and leasing demand picks up. Our forecasts and DDM-based TP are unchanged (WACC 7.8%, LTG 1.5%). BUY. Read More