Sunday, 15 November 2015

Life goes on - Accumulated CACHE Logistics Trust

The market has reacted badly on CACHE's private placement and the Paris terror attacks made sentiments worse. The private placement of units was done at $0.94, so I believe CACHE is being oversold. Today, the price reached $0.905, which is significantly lower than the private placement price. Hence, I seized this opportunity to accumulate more units.

As promised by the management, CACHE utilised part of the funds raised by the private placement to acquire a new logistics facility in Adelaide, Australia. This latest acquisition looks to be yield-accretive. It is a freehold property with 8.9% NPI yield and WALE of 4.6 years. Furthermore, the deal is a triple net lease structure with annual rental escalation built in. I like the swiftness in the management's execution. They accomplished what they promised efficiently. The gearing stays healthy at 35%.

Looking forward to full rental contributions from the newly-completed DHL facility and Australian acquisitions. Life goes on. Stay strong, France! :)



DK

3 comments:

  1. Cache is grossly oversold at the current price of 81 cts. It's managed by ARA with strong reputation of resourcefulness and transparency. At a dividend yield of around 10%, it already factored in impending US interest rate hikes and the potential two master-lease fate in whichever direction they go. Further attempt to short this counter is not worth it. The fundamentals are beginning to lend support to an unfairly beaten down stock. Logistics will continue to be in demand, I'm confident that ARA management is shrewd enough to overcome the current overhang to find potential tenants to fill the void given its vast network and experience in execution.

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    Replies
    1. Hi,

      I also believe that the new DHL logistics centre will be a positive catalyst too.

      Cheers!

      Delete
  2. Others tend to go for Logistics Management in the Philippines for their 3PL and Logistics needs.

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