Cache Logistics

Cache Logistics: Reported its first full year and 4Q10 results, which were in-line with estimates . YTD, NPI at $41.3m was exactly in-line with management’s forecast, while DPU of 5.588c was similarly in-line. Annualized DPU places FY10 yield at an attractive 7.8%, with management noting that Cache unitholders who have held the units since the IPO would have enjoyed a total return of 16%....

Going forward, management expects the demand for logistic properties in SG to remain firm, underpinned by sound economic fundamentals and favorable outlook for the regional economies. And remains confident in delivering forecast DPU for FY11 projected in IPO Prospectus. Cache portfolio comprises of six quality logistics properties located in Singapore...

We note that grp balance sheet remains strong, with a total debt of $178m, representing an aggregate leverage of 23.7%. The conservative gearing provides Cache with a high degree of financial flexibility in its pursuit of acquisition opportunities, while management has hedged its interest rate exposure with a two-year interest rate swap on 90% of the outstanding debt...

At current levels, grp appears failry valued, at 1.08x P/B, vs peers MIT of 1.15x P/B and yield of 6.2%, Ascendas REIT of 1.3x and yield of 6.1% and Cambridge industrial trust of 0.91x P/B and yield of 8.3%.