SINGAPORE (July 21): The manager of Cache Logistics Trust has declared a distribution per unit (DPU) of 1.800 cent for second quarter ended March, down 9.5% from its DPU of 1.989 cents in the same quarter a year ago on higher property-related expenses.
Revenue for the quarter fell marginally by 0.7% to $27.9 million from $28.1 million a year ago, mainly due to the divestment of Cache Changi Districentre 3 and lower income received under protest for 51 Alps Ave.
The revenue decline from these segments was however partially offset by higher rental contribution from DSC ARC and the Australian properties.
Net property income (NPI) fell by 4% as a result of the lower revenue, as well as higher property-related expenses resulting from the conversion of certain properties from master leases to multi-tenancies, mainly attributable to 51 Alps Ave and 40 Alps Ave.
Net financing costs for the quarter were $4.7 million, 0.6% higher than in 2Q16.
As such, distributable income fell 8.8% to $16.3 million compared to a year ago, due to lower income from operation and higher trust expenses associated with legal fees accrued for the ongoing 51 Alps Ave legal proceedings, in addition to other professional fees.
Cache’s portfolio committed occupancy has improved to 98.3% as at end-June, with a portfolio weighted average lease to expiry (WALE) of 3.5 years and approximately 1.8% of the portfolio’s leases expiring for the remainder of FY17.
In a separate press release, the manager of Cache highlights that DPU from operations reflected a 5.3% q-o-q improvement to 1.8 cent compared to 1.7 cent previously, which points to an improvement in earnings due to the trust’s portfolio rebalancing and growth strategy, and proactive leasing efforts.
“We are pleased to see that since embarking on the portfolio rebalancing and growth strategy in 2015, the Australian portfolio has seen an increase in year-to-date NPI by close to 11% compared to a year ago. In addition, our proactive asset management efforts have produced results as the portfolio committed occupancy has improved to 98.3% despite the lingering oversupply of industrial space in Singapore,” says Daniel Cerf, CEO of the manager.
“We continue to remain focused on our portfolio rebalancing and growth strategy to diversify our earnings and improve our capital structure over time.”
Units in Cache closed flat at 94 cents on Friday.
