Brokers' take

Cache Logistics Trust | Hold Target price: S$0.80 June 26 close: S$0.765 CGS-CIMB, June 25

Cache Logistics Trust announced that ARA Asset Management has entered into an agreement with CWT to purchase the remaining 40 per cent of ARA-CWT Trust Management (Cache) Ltd, the trust manager, and 60 per cent of Cache Property Management Pte Ltd, the property manager. Pricing details of the transactions have not been revealed. Post purchases, ARA will own 100 per cent of the trust and property managers. Following the completion of the sale, the right of first refusal granted by CWT to Cache would also expire.

We see the consolidation of ownership and decision-making as positive for Cache. Over the past three years, the trust has embarked on a portfolio rebalancing and growth strategy, particularly in Australia. With a greater alignment of interest with ARA, we believe the trust would continue to be able to tap into ARA's expanding presence and network in the Asia-Pacific region. In addition, the amalgamated interest in the property manager would also ensure good continuity in the management of Cache's properties. In terms of operations, confirmation of the expiry of the master lease at CWT Commodity Hub in April 18 and clarity over the potential impact of conversion into a multi-tenanted building should lend some stability to the share price.