Are Logistics SREIT Still Value for Money Now ?

Been awhile since last post, no excuse this time, purely lazy. Though I have not been posting, I am still updating both SREITs data and SREITs results date pages. Today, I would like to post something about logistics SREIT.

Feeling lazy

A lot of time, it is difficult to differentiate between logistics and industrial properties. Generally, logistics properties are refer to warehouses and distribution centres. On the other hand, industrial properties refer to properties which could be used for manufacture, office, trading or warehousing. For this post I will only cover SREITs with at least 35% income from its logistics properties:
i) Cache Logistics Trust (Purely Logistics)
ii) EC World REIT (Purely Logistics)
iii) Mapletree Logistics Trust (Purely Logistics)
iv) AIMS APAC REIT (Majority income from Logistics Sector)
v) Frasers Logistics & Industrial Trust (Majority income from Industrial Sector)
vi) Sabana Shari'ah Compliant Industrial REIT (Majority income from Industrial Sector)

Below is the fundamentals comparison table as of 30th June 2019 results:

Items	Unit	CLT	ECW	MLT	AAREIT	FLT	Sabana
Lease Profile
Portfolio Occupancy	%	95.48	99.66	96.97	92.85	99.48	84.89
Income Received in SGD	%	79.42	0	36.66	88.76	0	100
Highest Lease Maturity in 5 Years*	%	25.4	14.1	21.5	27.4	17.1	38.3
Weighted Average Lease Expiry, WALE*	year	3.2	4.6	4.8	2.38	6.27	2.4
Weighted Average Land Lease Expiry*	year	54.7	38.5	55.95	36.2	87.78	31.8
Debt Profile
Interest Cover Ratio	time	4.05	3.44	5.36	5	7.58	3.32
Cost of Debt	%	3.67	5.04	2.51	3.7	2.57	4.1
Fixed Debt over Total Debt	%	67.38	42.43	82.07	85.26	76.57	78.06
Unsecured Debt over Total Debt	%	81.17	0	100	24.85	66.06	21.69
Gearing Ratio*	%	37.9	32.4	36.8	33.8	35.4	30.9
Highest Debt Expiry in 5 Years*	%	22	86.65	24	34.05	41.95	55.98
Weighted Average Debt Expiry*	year	3.5	3	3.8	2.4	2.9	1.3
Diversification Profile
Major Sector Contribution	%	100	100	100	51.1	63.6	65.74
Top Geographical Location Contribution	%	79.42	98.59	36.46	88.76	37.91	100
Top Property Contribution	%	28.07	32.97	11.13	16.98	9.93	25.14
Top Tenant Contribution	%	20.6	40.36	9.23	15.27	6.25	13.03
Top 10 Tenants Contribution	%	63.6	98.76	26.63	55.65	31.58	50.79
Share Related Information
REIT Manager's Shareholding*	%	0	2.03	0.69	0.23	0.29	1.19
QoQ Dilutive Shares Increase	%	0.41	0.19	2.48	0.55	2.25	0
Financial Metrics
Property Yield (Annualized)	%	6.86	6.39	5.54	6.63	6.9	5.45
Distribution on Management Fees	time	8.19	9.59	5.3	9.35	7.94	6.39
Distribution on Capital (Annualized)	%	5	4.17	3.75	4.91	5.04	3.49
Distribution Margin	%	55.8	50.13	56.32	52	60.97	40.73
Support over Distribution	%	0	0	0	0	0	0
Growth Profile
QoQ NAV per Unit Growth	%	-2.19	-1.2	1.25	-0.66	-0.16	-1.25
QoQ DPU Growth	%	-2.71	0.12	0.76	-0.16	-0.55	-4.97
QoQ Interest Cover Ratio Growth	%	-2	0.07	-1.78	2.47	0.28	3.37
QoQ Property Yield Growth	%	-1.32	-0.14	-0.18	1.02	0.5	-0.75
QoQ Distribution on Capital Growth	%	-1.38	0.22	0.68	0.5	0.05	-2.22
QoQ Distribution Margin Growth	%	-1.29	0.94	1.53	0.15	-0.06	-1.74

Note:
i) Value without * is weighted average value for past 5 years, may be adjusted due to acquisition/disposal, equity fund raising or any events that affect average value drastically.
ii) Green being best 3 figure and red being worst 3 figure.
iii) All information are based on best effort without any guarantee on accuracy & reliability.

Let's summarize from the above table:
1) Lease Profile Winner - Mapletree & Frasers
2) Debt Profile Winner - Mapletree
3) Diversification Profile Winner - Frasers
4) Share Related Profile Winner -EC World & Sabana
5) Financial Metrics Winner - Cache
6) Growth Profile Winner - AIMS AMP
7) Overall with Most Green - 1st: Mapletree; 2nd: Frasers; 3rd: AIMS AMP

Fundamental winner goes to Mapletree Logistics Trust

Fundamentally, we can conclude which REITs are better, but what are their fair price ? If we apply the Relative Valuation Analysis method from previous post, we would get the below result:
1) Cache Logistics Trust - $ 0.705 to $ 0.72 (Current: $ 0.735)
2) EC World REIT - $ 0.705 to $ 0.76 (Current: $ 0.73)
3) Mapletree Logistics Trust - $ 1.23 to $ 1.34 (Current: $ 1.62)
4) AIMS APAC REIT - $ 1.31 to $ 1.38 (Current: $ 1.44)
5) Frasers Logistics & Industrial Trust - $ 1.02 - $ 1.14 (Current: $ 1.22)
6) Sabana Shari'ah Compliant Industrial REIT - $ 0.335 - $ 0.41 (Current: $ 0.445)

To answer this post title, Mapletree price is totally far from its 5 years average relative value while Frasers and AIMS AMP prices are slightly higher than 5 years average relative value. At this moment, only EC World REIT price is within the range, but there are risks of unfavorable lease profile and diversification profile. As for Cache and Sabana, both REITs fundamental seems to be deteriorating, it would be good to stay on sidelines and wait for sign of recovery before making any decision.

Hope the above post helps.