Daiwa House Logistics Trust (DHLT) DHLU has reported a distribution per unit (DPU) of 2.61 cents for the 2HFY2022 and 5.70 cents for the FP2022, in line with forecasts.
The FP is from the trust’s listing date of Nov 26, 2021 to Dec 31, 2022.
The in-line DPU came on the back of a strong operational performance during the FP2022 where all leases were successfully renewed. The lower finance expenses in Singapore dollar (SGD) terms also led to the in-line DPU.
That said, 2HFY2022 gross revenue came in 11.8% below its forecast of $29.8 million while gross revenue for the FP2022 came in 7.3% lower than forecasted at $68.7 million. The lower performance was attributable to the weaker Japanese yen (JPY) against the Singapore dollar (SGD). In JPY terms, however, revenue stood 5.8% and 3.7% above forecasts for the 2HFY2022 and FP2022.
Net property income (NPI) for the 2HFY2022 and FP2022 stood 12.8% and 8.3% lower than forecasted at $23.0 million and $53.0 million respectively on the back of the lower revenue and weaker JPY.
Distributable income for the 2HFY2022 and FP2022 came in 0.1% higher than forecasted at $17.7 million and $38.6 million respectively.
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As at Dec 31, 2022, the trust’s portfolio occupancy stood at 98.6% with a weighted average lease expiry (WALE) of 6.4 years.
Cash and cash equivalents for the period stood at $48.9 million as at Dec 31, 2022.
In its statement, the trust’s manager noted that its borrowings, which were fully denominated in JPY, provided a natural hedge as the value of its properties are also denominated in JPY.
“We are pleased that DHLT was able to deliver a stable performance for FP2022 amidst challenges and uncertainties that have affected economic and financial markets,” says Takeshi Fujita, CEO of the manager.
“From the operational perspective, DHLT had a strong performance. All leases that expired during FP2022 were successfully renewed, and a high occupancy rate of 98.6% was maintained. Average rent increase for leases that were entered into or renewed during FP2022 was 3.0%. This is a testament to the quality of the properties and the strong relationship we have with the tenants. We are also pleased to deliver DPU of 5.70 cents for FP2022, which was in line with the forecast,” he adds.
Looking ahead, the manager says demand for logistics facilities will continue to be generally well supported by third-party logistics (3PL) and e-commerce sectors in the near-term.
It is also “cautiously optimistic” on the immediate outlook of the logistics sector in Japan considering the structural undersupply of modern logistics facilities.
In addition, the manager adds that it is mindful of the challenges posed by the macro environment and believes that the resilience of the portfolio which is underpinned by the quality of the properties having long a WALE can mitigate the impact from such challenges.
The trust’s DPU will be paid on March 30.
Units in DHLT closed at 61.5 cents on Feb 22.
