Daiwa House Logistics Trust posts 6.1% lower H1 DPU of S$0.0245
Net property income falls 8.2% to S$21.2 million
DISTRIBUTION per unit (DPU) of Daiwa House Logistics Trust (DHLT) for the first half of fiscal year 2024 fell 6.1 per cent year on year to S$0.0245 from S$0.0261.
The manager of the trust on Monday (Aug 12) also posted H1 revenue of S$27.6 million, down 10.7 per cent from S$30.9 million.
Net property income (NPI) decreased 8.2 per cent to S$21.2 million from S$23.1 million.
This was attributed to the weaker yen against the Singapore dollar. The manager added that the average exchange rate for the yen against the Singapore dollar was weaker by about 10 per cent in H1 FY2024, compared with H1 FY2023.
The manager, however, noted that NPI in yen terms recorded a 2.8 per cent year-on-year increase.
Distributable income for H1 FY2024 was S$17.1 million, down 5.7 per cent from S$18.1 million. The distribution will be paid out on Sep 26, after the record date on Aug 20.
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The trust has maintained a portfolio occupancy of 96.6 per cent, with a weighted average lease expiry of 6.3 years. Additionally, its interest coverage ratio was 11.7 times with an aggregate leverage of 36.8 per cent.
“Most of the tenants for the leases expiring in H2 FY2024 have indicated intention to renew, and we expect some of these renewals to achieve modest rent uplift,” DLHT’s manager said.
In H1 FY2024, DHLT acquired two properties – one in Japan and the other in Vietnam. This takes total net lettable area to 476,614 square metres.
Both properties are fully occupied as at Jun 30, 2024.
DPL Ibaraki Yuki, located in Greater Tokyo, is a freehold logistics property.
D Project Tan Duc 2 in Vietnam – a cold storage facility located between Ho Chi Minh City and the Mekong Delta region, marks the trust’s first property outside Japan as it expands into a new market.
Assuming the acquisition of D Project Tan Duc 2 was completed on Jun 30, and the related borrowings were drawn on the same date, the aggregate leverage would be 38.7 per cent.
Chief executive officer of the manager Jun Yamamura said: “While a weaker yen has affected DHLT’s results in H1 FY2024, operations have remained steady.”
He added: “Most of the tenants for the leases expiring in H2 FY2024 have indicated intention to renew, and we expect some of these renewals to achieve modest rent uplift.”
Demand for logistics facilities in Japan is expected to remain robust due to the growth in the country’s e-commerce and third-party logistics markets, and a limited supply of modern logistics facilities, among others.
The country’s restrictions on overtime for lorry drivers could also boost demand for transition locations along routes, the manager noted.
In Vietnam, the growth of e-commerce and a growing middle class are projected to drive demand for logistics facilities in the country.
The manager noted that demand for cold storage facilities could grow as Vietnam’s demand for fresh products rises, as seen in the increasing number of supermarkets.
The manager said that e-commerce accounted for only 8.5 per cent of total retail sales of consumer goods and services in the country, even with strong growth in recent users.
With more than 70 million Internet users in Vietnam, there is potential for further growth, it added.
Units of the trust closed 1.7 per cent or S$0.01 lower at S$0.58 on Thursday.
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