Cache Logistics Trust

Cache Logistics Trust: 2Q12 results were in-line with expectations. NPI grew 8.1% yoy, led by acquisitions and rental step-ups. DPU at 2m, -5% yoy due to enlarged share base from the private placement in March. Rents are likely back-end loaded with newly acquired Pandan Logistics Hub and Pan Asia Logistics Centre to fully contribute in 2H12. Organic growth continues to stem from the 1.5-2.5% step-up rental escalation structured into master leases. Mgt has already begun renewal of master leases due in FY15/16 at similar step-up rates. Mgt remains committed to acquisition-led growth. Following the acquisition of a pipeline asset from CWT, ROFR to a Malaysian warehouse was secured in 2Q12, bringing assets in the pipeline back to 13 properties with c.3.5m sf GFA. Cache continues to explore the Msian market to gain familiarity, and stated preference for larger assets, albeit harder to come by. At current price, grp trades at 1.2x P/B, with a yield of 7.7% and leverage ratio at 30.5%. Ratings as follow: CIMB maintains OutPerform with $1.19 TP.