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Thursday, August 20, 2020

ARA LOGOS Logistics Trust Analysis @ 20 August 2020

Basic Profile & Key Statistics

ARA LOGOS Logistics Trust (ALOG) invests in logistics properties in Singapore and Australia.


Lease Expiry

Occupancy is healthy at 97%. WALE is short at 2.8 years where highest lease expiry of 32.8% falls in FY 2021. Weighted average land lease expiry is short at 46.08 years.


Debt Maturity

Gearing ratio and cost of debt are high at 40.4% and 3.5%. Fixed-rate debt % is low at 68.5%. Unsecured debt % is moderate at 74.3%. Interest cover ratio is slightly low at 3.6 times. WADE is long at 3.5 years where the highest debt maturity of 43% falls in the year 2024.


Diversification Profile

Top geographical, top property, top tenant and top 10 tenants contribution are high at 73.8%, 25.6%, 14.3%, and 54.5% respectively.


Key Financial Metrics

Property yield is high at 6.4%. ALOG retain S$ 2 mils from distribution, therefore affected management fees over distribution, distribution on capital, and distribution margin, the values are 14%, 4.3% and 47.8% respectively. Without retention, the values would be 13.5%, 4.5% and 49.5% respectively.


Related Parties Shareholding

As compared to SREITs median, sponsor holding lesser stake and directors of REIT manager holding higher stake. Manager do not hold any shares. Part of the manager's fee is paid in shares, but manager normally sells all its share holding within the same quarter upon receipt.


Trend

DPU and NAV per unit are on a downtrend for the past 5 years. Same happen to distribution margin too but it has stabilized since 2Q 2018


Relative Valuation

i) Average Dividend Yield  - Apply past 4 quarters DPU of 5.012 cents to average yield of 8.28% will get S$ 0.605. If we consider without retention, DPU would be 5.195 cents which translates into S$ 0.625.

ii) Average Price/NAV - Average value is at 1.08, apply the latest NAV of S$ 0.582 will get S$ 0.63.


Author's Valuation

FavorableLess Favorable
WADEWALE
Property YieldConcentrated Lease Expiry
Distribution on CapitalWeighted Average Land Lease Expiry
 Gearing Ratio
 Cost of Debt
 Concentrated Debt Maturity
 Top Geographical Weightage
 Top Property Weightage
 Top Tenant & Top 10 Tenants Weightage
 DPU Downtrend
 NAV per Unit Downtrend

It is worth noting that ALOG synergy has only been completed very recently in April. The new CEO of the manager has also just assumed her role on 15th August. Therefore it is still early to review the performance of ALOG, we shall just wait and see.


The above analysis information is extracted from SREITs Dashboard, you are welcome to use the information there for your analysis. You could also refer SREITs Data for an overview of Singapore REITs. If you like my sharing, please join the Facebook group - REIT Investing Community where you could read, share, and discuss REITs related topics. Please also invite your like-minded friends to the group.


*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee the accuracy, completeness, and reliability. It should not be taken as financial advice or statement of fact. I shall not be held liable for errors, omissions as well as loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.

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