Cache Logistics Trust reports 2Q19 net property income fell 5 percent

Singapore two-dollar bills

Cache Logistics Trust reported Thursday its second quarter net property income fell 5.4 percent on-year to S$20.56 million after the divestment of two properties.

Gross revenue for the quarter ended 30 June declined 7.4 percent on-year to S$27.80 million, the trust said in a filing to SGX.

The distribution per unit (DPU) was 1.321 Singapore cents, down 6.9 percent from 1.419 Singapore cents in the year-ago quarter, the filing said.

Cache Logistics Trust attributed the earnings decline to converting the Cache Gul LogisCentre property to a multi-tenancy structure from a master lease, the divestment of the 40 Alps Avenue and Jinhan Chemical Warehouse properties, and downtime between replacement tenants at the Commodity Hub property.

That was partly offset by contributions from a newly acquired warehouse in Altona, Victoria, Australia in April, the trust said.

“Cache experienced a challenging quarter,” Daniel Cerf, executive officer of the trust’s manager, said in the statement.

“Nevertheless, even though the economic environment continues to face headwinds and limited organic growth by logistics operators, we
expect Singapore’s industrial supply market to stabilise bearing in mind the limited new supply entering the market,” Cerf said. “We have made great strides in our leasing momentum in 2019, securing 657,800 square feet of leases and renewals year-to-date.”

Portfolio occupancy was at 90 percent at the end of the quarter, it said.

For the first half, Cache Logistics Trust reported net property income fell 0.6 percent on-year to S$44.22 million on gross revenue of S$58.63 million, down 0.7 percent on-year. The DPU for the first half was 2.834 Singapore cents, down 3.1 percent from 2.926 Singapore cents in the year-ago period, the filing said.

In its outlook, Cache was cautious, noting both Knight Frank and Savills expect demand for Singapore’s industrial space would remain soft amid ongoing trade tensions.

“Industrial rents continue to face pressure on the back of a subdued economic outlook, volatile external environment and contraction in the
electronics sector,” the trust said, but added that less new industrial space would be brought to market this year.

Cache’s portfolio had 27 logistics warehouse properties across Singapore and Australia at end-June.

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