Daiwa House Logistics Trust's 2H FY24 Result Review

Basic Profile & Key Statistics

Key Indicators

Performance Highlight

Gross revenue and NPI improved YoY, primarily driven by contributions from DPL Ibaraki Yuki and D Project Tan Duc 2, acquired in 2024. However, the weakening JPY against SGD partially offset these gains. Meanwhile, distributable income and DPU declined YoY due to lower realized foreign exchange gains and higher finance expenses.

Rental Reversion

DHLT achieved a weighted average rent reversion of approximately 5% for FY24.

Acquisition

In July 2024, DHLT completed the acquisition of D Project Tan Duc 2 in Vietnam, marking its first property outside Japan.

Related Parties Shareholding

• REIT Sponsor's Shareholding: Less Favorable
• REIT Manager's Shareholding: Favorable
• Directors of REIT Manager's Shareholding: Less Favorable

Lease Profile

• Committed Occupancy: Moderate
• Highest Annual Lease Expiry in 4 Years: Favorable
• WALE: Favorable
• Weighted Average Land Lease Expiry: Moderate

Debt Profile

• Adjusted Interest Coverage Ratio: Favorable
• Cost of Debt: Favorable
• Gearing Ratio: Moderate
• Fixed Rate Debt Proportion: Favorable
• Unsecured Debt Proportion: Favorable
• Highest Annual Debt Maturity in 4 Years: Moderate
• WADM: Moderate

Diversification Profile

• Top Geographical Weightage: Favorable
• Top Property Weightage: Less Favorable
• Top 5 Properties' Weightage: Moderate
• Top Tenant Weightage: Moderate
• Top 10 Tenants' Weightage: Less Favorable

Key Financial Metrics

• Property Yield: Less Favorable
• Operating Distributable Income over Manager's Fees: Favorable
• Operating Distributable Income on Capital: Favorable
• Operating Distributable Income Margin: Favorable
• Operating Distribution Proportion: Moderate

DPU Breakdown

• TTM Distribution Breakdown:
• 96.3% from Operation
• 3.6% from Management Fees Paid in Units
• 0.1% being Retained 

Trends (Up to 10 Years)

• Uptrend: Adjusted Interest Coverage Ratio, Operating Distributable Income on Capital, Operating Distributable Income Margin
• Slight Uptrend: None
• Flat: Committed Occupancy, Operating Distributable Income over Manager's Fees
• Slight Downtrend: DPU from Operations, Top 5 Properties' Weightage, Top 10 Tenants' Weightage, Operating Distribution Proportion
• Downtrend: NAV per Unit, Property Yield

Price Range & Relative Valuation Metrics

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

Author's Opinion

Compared to the previous quarter, gross revenue and NPI improved due to contributions from D Project Tan Duc 2. However, distributable income and DPU declined due to lower realized exchange gains and higher finance expenses. In terms of debt, 25% will mature in 2025, requiring refinancing.

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*Disclaimer: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my findings and should not be considered professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decisions.