The manager of Daiwa House Logistics Trust on Friday (Feb 28) posted a distribution per unit (DPU) of S$0.0234 for its second half ended Dec 31, down 10.3 per cent from S$0.0261 in the previous corresponding period.
This brings the total DPU for FY2024 to S$0.0479, down 8.2 per cent from S$0.0522 in FY2023.
Its H2 distributable income stood at S$16.4 million, down 10 per cent from S$18.2 million in FY2023. The distribution will be paid out on Mar 26, after the record date of Mar 10.
Its half-year revenue stood at S$29.5 million, up slightly by 2 per cent from S$29 million previously. The marginal top-line growth for the period was mainly due to the contributions from two acquisitions in 2024, but partly offset by a weaker Japanese yen.
It acquired its first non-Japan property, a single storey cold storage warehouse in Vietnam, D Project Tan Duc 2, in July as well as DPL Ibaraki Yuki, a freehold logistics property in Greater Tokyo, in March.
Jun Yamamura, CEO of DHLT’s manager, said the acquisition of the Vietnam warehouse “marked an important milestone for DHLT” as its first property beyond Japan.
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“The logistic sector in Vietnam is expected to be supported by factors such as growing foreign investments, improving infrastructure as well as growth of the ecommerce market,” said DHLT’s manager on Thursday.
As Japan’s e-commerce penetration rate of 9.4 per cent is low relative to other matured e-commerce markets such as China, US and the UK, it has potential for further growth, the manager added.
Net property income for the half-year inched up 2.1 per cent to S$22.7 million from S$22.2 million in the year-ago period.
Its property expenses for H2 rose 1.5 per cent to S$6.9 million from S$6.8 million in the year-ago period, largely due to the acquisitions, higher leasing commissions, and green certification costs for its Japan portfolio.
Finance expenses likewise climbed 16.5 per cent to S$3.6 million from S$3.1 million in the previous year due mainly to additional borrowings taken to fund the acquisitions.
Full-year distributable income dropped 7.8 per cent to S$33.5 million from S$36.4 million year on year. Gross revenue for FY2024 contracted 4.6 per cent to S$57.1 million from S$59.9 million for FY2023, as NPI eased 3.2 per cent to S$43.9 million from S$45.3 million.
The full-year declines were mainly due to the weaker Japanese yen, which mediated contributions from its acquisitions.
This was despite its Japanese portfolio achieving a gross revenue 1.2 per cent higher than that of the previous financial year on contributions from the DPL Ibaraki Yuki acquisition, although this was partly offset by lower occupancy.
As at Dec 31, 2024, the trust’s net asset value per unit was down 6.8 per cent year on year at S$0.69, from S$0.74, mainly due to the weaker Japanese yen.
The value of its total assets declined marginally by S$18.2 million or 1.7 per cent, but remained largely unchanged from the S$1.1 billion recorded the year before.
Its portfolio valuation was up 0.5 per cent at S$835.9 million from S$831.9 million the prior year. Portfolio occupancy dropped to 97.6 per cent from 100 per cent, but remained healthy, with 17 of its 18 properties occupied.
The weighted average lease expiry of its portfolio was 6.6 years, with nearly 50 per cent of leases expiring in or after 2030. Aggregate leverage ratio was up at 38.5 per cent, from 35.2 per cent previously.
Near-term challenges ahead
While supply increases pose near-term challenges to Japan’s logistics sector, its fundamentals are set to remain strong in the long-run, with demand fuelled by the e-commerce sector’s growth and supply expected to moderate in the coming years, DHLT said.
Regarding DHLT’s capital management, Yamamura said: “The security related to the borrowings in Japan onshore was released and as a result, no properties are currently encumbered. We believe that this will provide DHLT with more financing options, improving its financial flexibility.”
Units of Daiwa were trading 0.9 per cent or S$0.005 lower at S$0.58 as at 1.42 pm on Friday.
