DW 4Q2012 S-REITs Review (Industrial)

1. CACHE Logistics Trust

Positives/ catalysts:

·       New acquisitions made in 2012 have started to contribute rental income. Buying a newly-completed full ramp-up warehouse along 15 Gul Way.  

·       Increase in distributable income.

·       Largest ramp-up warehouse provider in Singapore.

·       100% occupancy rate.

·       Strong working relationship with quality MNC tenants.

·       Triple net master leases.

·       No refinancing needs until 2014.

·       Pipeline of possible future acquisitions from sponsor.

Negatives/ Risks:

·       More competition as new industrial properties are ready this year.

2. AIMS AMP Capital REIT

Phase 1 at 20 Gul Way is completed

Positives/ catalysts:

·       Completion of Phase 1 at 20 Gul Way. This new property has started to contribute rental income. Full contribution expected in 1Q2013.

·       Phase 2 is set to be completed on schedule and within budget by 2013 year end. Full rental contribution expected in 1Q2014.

·       DPU is expected to increase by 15% in 2014.

·       Healthy gearing level of 33.6%.

·       High occupancy rate of 98.5%.

·       Security deposits per property of 6.8 months.

·       Efficient in re-negotiating new leases while achieving significant positive rental reversions.

·       Long average unexpired land tenure at around 40 years.

·       103 Defu Lane 10 re-development to maximise its plot ratio from 1.2 to 2.5, with a profit margin of 14%.

Negatives/ Risks:

·       More competition as new industrial properties are ready this year.

3. Sabana REIT

      

      Positives/ catalysts:

·       New acquisitions made in 2012 are contributing fully.

Negatives/ Risks:

·       DPU payout will drop from 100% to 90% this year.

·       More than 40% of leases are set to expire this year. Management has not provided any meaningful updates on this so far.

·       More competition as new industrial properties are ready this year.