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Sunday, June 05, 2022

Daiwa House Logistics Trust Review @ 5 June 2022

Basic Profile & Key Statistics
  • Main Sector(s): Logistics & Retail
  • Country(s) with Assets: Japan
  • No. of Properties (exclude development/associate/fund): 14

Performance Highlight

Despite gross revenue being slightly lower than forecast, NPI, distributable income and DPU are slightly higher than forecast. 

Consumption Tax Loan
On 28 Apr, DHLT has repay the consumption tax loan and subsequently, gearing was lowered to 32.2%.

Related Parties Shareholding

  • REIT sponsor's shareholding: Below median for more than 20%
  • REIT manager's shareholding: 0%
  • Directors of REIT manager's shareholding: Below median for more than 20%

Lease Profile

  • Occupancy: ± 5% from median
  • WALE: Above median for more than 20%
  • Highest lease expiry within 5 years: Below median for more than 10%; Falls in 2024
  • Weighted average land lease expiry: ± 10% from median

Debt Profile

  • Gearing ratio: ± 10% from median (below median for more than 10% after repayment of consumption tax loan)
  • Gearing ratio including perps: ± 10% from median (below median for more than 10% after repayment of consumption tax loan)
  • Cost of debt: Below median for more than 20%
  • Fixed rate debt %: 100%
  • Unsecured debt %: 0%
  • WADM: Above median for more than 10%
  • Highest debt maturity within 5 years: ± 10% from median; Equally divided into 2024,2025 and 2026.
  • Interest coverage ratio: Above median for more than 20%

Diversification Profile

  • Top geographical contribution: ± 10% from median
  • Top property contribution: Above median for more than 20%
  • Top 5 properties' contribution: ± 10% from median
  • Top tenant contribution: Above median for more than 20%
  • Top 10 tenants' contribution: Above median for more than 20%

Key Financial Metrics

  • Property yield: Above median for more than 10%
  • Management fees over distribution: Below median for more than 20%; $10 distribution for every dollar paid 
  • Distribution on capital: ± 10% from median
  • Distribution margin: ± 10% from median

Trends

* DPU in 4Q 2021 is annualized to 3 months DPU.
  • Slight Uptrend: Distribution on Capital, Distribution Margin
  • Flat: DPU, Interest Coverage Ratio, Property Yield
  • Slight Downtrend: NAV per Unit

Relative Valuation

  • P/NAV: Below -1SD for 1y 
  • Dividend Yield: Above +2SD for 1y

Author's Opinion

Favorable Less Favorable
Diversified SectorLow REIT Sponsor's Shareholding
High OccupancyLow REIT Manager's Shareholding
Long WALELow Directors of REIT Manager's Shareholding
Well Spread Lease Expiry0% Unsecured Debt
Low Gearing Ratio (Post Consumption Tax Repayment)High Top Property Contribution
Low Cost of DebtHigh Top Tenant & Top 10 Tenants Contributions
100% Fixed Rate Debt 
Long WADM 
High Interest Coverage Ratio 
High Property Yield 
Competitive Management Fees

The performance beat the forecast slightly. 2 properties, namely DPL Sendai Port and DPL Koriyama sustained some damages due to an earthquake on 16 March, though, both properties remained in operation. 


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SREITs Dashboard - Detailed information on individual Singapore REIT

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REIT Analysis - List of previous REIT analysis posts


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*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions and loss or damage due to 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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