To The Moon

$Daiwa Hse Log Tr(DHLU.SI)$

Basic Profile & Key Statistics

• Main Sector(s): Logistics & Retail

• Country(s) with Assets: Japan

• No. of Properties (exclude development/associate/fund): 16

Key Indicators

Performance Highlight

Gross revenue and NPI are lower than IPO forecast due to the impact of weaker JPY/SGD forex. However, distributable income and DPU are able to meet the forecast mainly due to lower finance expenses, trust expenses and realized exchange gain.

Rental Reversion

Rental reversion is at 3% for FY22.

Divestment

Acquisition of DPL Iwakuni 1 & 2, D Project Matsuyama S and underlying freehold land of D Project Iruma S were completed on 8 Dec 2022.

Distribution Breakdown

• Distributable Income Breakdown:96.4% from Operation3.6% from Fees Payable/Paid in Units

• Distribution = 99.9% of Distributable Income

• Distribution to Perpetual Securities Holder = 2.7% of Distributable Income

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

• Gearing Ratio including Perps: ± 10% from median

• Cost of Debt: Below median for more than 20%

• Fixed Rate Debt %: 100%

• Unsecured Debt %: 0%

• WADM: ± 10% from median

• Highest Debt Maturity within 5 Years: ± 10% from median; Falls in 2026

• Interest Coverage Ratio: Above median for more than 20%

Diversification Profile

• Top Geographical Contribution: Below median for more than 10%

• 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: ± 10% from median

• Management Fees over Distribution: Below median for more than 20%; $14.08 distribution for every dollar paid 

• Distribution on Capital:  ± 10% from median

• Distribution Margin: Above median for more than 20%

Trends

• Uptrend: Interest Coverage Ratio, Distribution on Capital, Distribution Margin

• Slight Uptrend: Occupancy

• Flat: DPU

• Downtrend: NAV per Unit, Property Yield

* DPU in 4Q 2021 is annualized to 3 months DPU.

Relative Valuation

• P/NAV: Below average for 1y; Below -1SD for 3y

• Dividend Yield: Above average for 1y & 3y 

Author's Opinion

Despite the JPY being weak against SGD, DHLT has managed to meet its DPU forecast. In addition, there won't be any concerns related to rising interest rates in the near future since all of its debt is fixed and refinancing won't be required until Nov 2024. Looking ahead, DHLT's performance is expected to improve with the full half-yearly contribution from DPL Iwakuni 1 & 2 and D Project Matsuyama S.

You could also refer below for more information:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Review - List of previous REIT analysis posts

*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.