[SINGAPORE] Daiwa House Logistics Trust (DHLT) announced on Friday (May 9) that its distributable income for the first quarter ended Mar 31 was 9.9 per cent lower at S$8.2 million, from S$9.2 million in the same year-ago period.
This was mainly attributed to increased interest expenses from additional borrowings, higher interest rates due to the refinancing and restructuring of loans, and lower realised exchange gains.
Net property income (NPI) of the overall portfolio for the quarter stood at S$11.1 million in Singapore-dollar terms, up 2.7 per cent from S$10.8 million, in light of the acquisition of a single-storey cold-storage warehouse D Project Tan Duc 2 in Vietnam in July 2024. This was the real estate investment trust (Reit)‘s first foray into Vietnam.
Meanwhile, for the Japan portfolio, NPI in yen terms declined 1 per cent this quarter to 1.19 billion yen (S$10.6 million) from 1.2 billion yen in the corresponding year-ago period, as contributions from two-storey warehouse DPL Ibaraki Yuki acquired in March 2024 was offset by vacancies in the Japan portfolio and higher property-related expenses.
Gross rental income in yen was 0.1 per cent higher at 1.39 billion yen for the period, from 1.389 billion yen.
Gearing stood at 41.1 per cent as at Mar 31, with a weighted average lease expiry of 6.7 years. The interest coverage ratio was at 7.4 times, and portfolio occupancy was at 92.1 per cent.
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The Japan logistics market faced near-term challenges due to a large supply of logistics space in certain sub-markets in recent years, said the manager.
“However, the logistics sector in Japan is expected to be stable in the long term with demand well-supported by factors such as the growth of e-commerce, which is a key driver of the demand for logistics space, continued expansion of the third-party logistics sector, and increased demand for distribution bases in relay points due to restrictions on overtime of truck drivers,” it added.
In Q1 FY2025, DHLT also acquired freehold logistics property DPL Gunma Fujioka, located in Greater Tokyo, Japan.
It was built in 2022 and is leased entirely to a blue-chip tenant, which is a group company of a large multinational consumer goods corporation.
The property is strategically located close to a highway junction and ramp, therefore providing easy accessibility to the northern part of Greater Tokyo, said Jun Yamamura, chief executive officer of the manager.
He added that healthy rent uplift achieved for the vacated spaces that were re-leased was encouraging, despite a higher level of vacancy recorded, and stressed that the manager will continue to work closely with the property manager and third-party agents to fill up the remaining vacant spaces.
The logistics segment in Vietnam is also expected to be positive, supported by the country’s economic expansion, e-commerce sector growth and further infrastructure investments.
Units of DHLT closed 0.9 per cent or S$0.005 lower at S$0.57 on Friday.
