Daiwa House Logistics Trust’s YTD distributable income in line with forecasts

Daiwa : DHLU 0% House Logistics Trust : DHLU 0%’s distributable income met its pro-rated forecast of S$29.8 million for the financial year to date (YTD) spanning Nov 26, 2021 to Sep 30, 2022.

The achievement came despite lower-than-expected net property income (NPI) of S$41.8 million, 6.3 per cent below the forecast NPI of S$44.6 million. The manager attributed it to foreign exchange volatility, in a Q3 business update on Wednesday (Nov 9).

In terms of Japanese yen, NPI for YTD FY2022 outperformed the pro-rated forecast NPI by 2 per cent.

Gross revenue for the period was 5.8 per cent lower than the forecast gross revenue of S$57.3 million, at S$53.9 million.

The trust nonetheless met its forecast distributable income as its finance expenses of S$6.4 million came in 18.6 per cent lower than the forecast S$7.9 million. The manager attributed this to lower interest rates for a term loan, as well as a weaker yen compared to forecast assumptions.

As at Sep 30, 2022, the trust’s overall portfolio occupancy rate remains at 98.6 per cent, with all but one of its properties fully occupied.

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Its manager said no tenants have asked for any rental relief so far. About 79 per cent of its tenants are involved in growth sectors such as third-party logistics (3PL) and e-commerce, it added.

Overall portfolio aggregate weighted average lease expiry (WALE) by occupied net lettable area as at end-September stood at 6.6 years, with the WALE of single-tenanted built-to-suit properties at 10 years. The WALE of multi-tenanted properties stood at 5.5 years.

The manager said all leases that were to expire during YTD FY2022 have been 100 per cent renewed, with the average rent increase for leases that were entered into, or renewed, at 2.9 per cent.

Excluding perpetual securities, net assets attributable to unitholders as at end-September was S$516.8 million, translating to a net asset value per unit attributable to unitholders of S$0.765.

The manager expects demand for the logistics space to remain healthy, highlighting continued growth prospects in Japan’s e-commerce and 3PL sectors.

It remains “cautiously positive” on the immediate outlook of the logistics sector in Japan, while also “mindful of the challenges posed by the macro environment”.

Units of Daiwa House Logistics Trust were unchanged at S$0.56 as at 9.31 am on Wednesday, after the business update was released.