ARA LOGOS Logistics Trust Review @ 8 February 2022

Basic Profile & Key Statistics

ARA LOGOS Logistics Trust (ALOG) is a Logistics REIT that owns 30 properties in Singapore and Australia. 

Performance Highlight

Gross revenue, NPI and distributable income have increased YoY mainly due to contribution from the

acquired Australian properties and fund investment, but offset by divestment of Kidman Park and ALOG Changi Districentre 2. DPU has declined YoY due to enlarged unitholder base as well as manager choose to received 100% of 4Q base fee and performance fee in cash. 

Rental Reversion

Rental reversion is at 3.1% for FY2021.

Acquisition

On 11th January 2022, ALOG has completed its last Australia property - 21 Curlew Street, Port of Brisbane which after the practical completion on 17th December 2021.

Asset Enhancement Initiatives

There are AEI works carried at 5 Singapore properties in which all are expected to be completed by 2Q 2022. 

Related Parties Shareholding

• REIT sponsor's shareholding is low at 11.974%
• REIT manager's shareholding is low at 0.521%
• Directors of REIT manager's shareholding is moderate at 0.126%

Lease Profile

• Occupancy is high at 99%
• WALE is moderate at 4.4 years
• Highest lease expiry within 5 years is low at 21.9% which falls in 2026
• Weighted average land lease expiry is short at 43.76 years

Debt Profile

• Gearing ratio is slightly high at 39.5%. Include perps, gearing is at 44.9%.
• Cost of debt is high at 2.77%
• Fixed rate debt % is low at 66.7%
• Unsecured debt % is moderate at 81.1%
• WADM is moderate at 2.9 years
• Highest debt maturity within 5 years is slightly high at 33% which falls in 2026
• Interest coverage ratio is slightly high at 4.7 times
• Preferred/perpetual securities over debt is slightly high at 12%

Diversification Profile

• Top geographical contribution is high at 68.1% 
• Top property contribution is high at 27.9% 
• Top 5 properties contribution is moderate at 62.8% 
• Top tenant contribution is slightly high at 13.4% 
• Top 10 tenants contribution is high at 50.1%

Key Financial Metrics

• Property yield is high at 6.2%
• Management fees over distribution is moderate at 14.3% in which unitholders receive S$ 6.99 for every dollar paid 
• Distribution on capital is high at 4.2%
• Distribution margin is moderate at 47.3%
• 3% of TTM DPU is from distribution from income support

Trends

Let's look at the period after the synergy with LOGOS in April 2020.

• Uptrend - NAV per Unit, Interest Coverage Ratio
• Downtrend - DPU, Property Yield, Distribution on Capital, Distribution Margin

Relative Valuation

• P/NAV - Average for 1y; Above average for 3y & 5y
• Dividend Yield - Average for 1y; Below -1SD for 3y & 5y

Author's Opinion

Favorable	Less Favorable
High Occupancy	Low REIT Sponsor's Shareholding
Well Spread Lease Expiry	Low REIT Manager's Shareholding
High Property Yield	Short Weighted Average Land Lease Expiry
High Distribution on Capital	High Cost of Debt
NAV per Unit Uptrend	Low Fixed Rate Debt %
Interest Coverage Ratio Uptrend	High Top Geographical Contribution
	High Top Property Contribution
	High Top 10 Tenant Contribution
	DPU Downtrend
	Property Yield Downtrend
	Distribution on Capital Downtrend
	Distribution Margin Downtrend

As compared to the previous quarter, the gross revenue and NPI has improved. However, DPU is lower possibly due to manager choose to receive 100% of 4Q manager base fee and performance fee in cash. For the merger, ESR-REIT has revised the offer just 1 week before the scheduled EGM. The revised scheme is as below:

The EGM has been deferred to March, the firm date to be announced later. You could refer to my previous post - Updated Theoretical Pegged Price for ALOG + ESR-REIT Merger for the pegged price table.

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 Analysis - List of previous REIT analysis posts

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Singapore REITs Post Telegram Channel - Join to receive posts for Singapore REITs

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REIT Investing Community - Facebook Group where members share and discuss REIT topic

*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 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.