Cache Logistics Trust reports sharply lower Q1 payout

SINGAPORE - Cache Logistics Trust has posted a sharply reduced distribution per unit of 1.8 Singapore cents for the first quarter, down 11.7 per cent from the same period last year.

The trust reported a 2.9 per cent drop in revenue to S$27.1 million and a deeper 5.8 per cent fall in net property income to S$20.8 million for the three months to March 31.

The fall in gross revenue was due to a lower revenue contribution from 51 Alps Ave and Cache Changi Districentre 3, which was divested in January 2017. This was partly offset by revenue contribution from DHL Supply Chain Advanced Regional Centre and the Australian portfolio, including the latest acquisition of the Spotlight warehouse located in Laverton North, Victoria, Australia.

The drop in net property income was due to a lower gross revenue and higher property expenses associated with more multi-tenanted properties.

Income available for distribution for the quarter ended 31 March 2017 fell by 11 per cent to S$16.2 million due to a lower income from operations as well as a lower capital distribution from the sale proceeds of Kim Heng Warehouse.

"Our focus in financial year 2017 is on improving operating performance in the Singapore portfolio wherever possible in view of the acute oversupply in the market and industry headwinds," said Mr Daniel Cerf, chief executive officer of the trust manager, adding that "we intend to continue with our portfolio rebalancing and growth strategy to grow and diversify our revenue contributions outside of Singapore".

Last month, Cache completed the acquisition of a single-storey warehouse with ancillary office space located in Laverton North, a suburb of Melbourne, Victoria, Australia. The warehouse is currently occupied by Spotlight, with a remaining lease tenure of 4.2 years.

The A$22.25 million (S$23.4 million) acquisition was funded by the proceeds received from the divestment of Cache Changi Districentre 3. This divestment and the acquisition of the Spotlight warehouse is part of the manager's portfolio rebalancing and growth strategy which seeks to recycle capital into higher-performing assets.

Cache's portfolio committed occupancy improved from 96.4 per cent as at Dec 31 to 97.2 per cent as at March 31.

The portfolio weighted average lease to expiry was some 3.6 years, with only 4.7 per cent of the portfolio's leases due for renewal in FY2017.

About 80,000 square feet of leases were signed during the quarter, of which more than half were new leases.

Books closure for first quarter distribution will be on April 28.

Cache units ended half a cent lower at 87 Singapore cents. The results were announced after market close.