Daiwa House Logistics Trust - DBS Research 2023-02-24: Worst Is Over As Yen Bottoms

• Daiwa House Logistics Trust (SGX:DHLU)'s earnings in JPY terms continue to outperform projections due to higher occupancy rates and higher rents achieved. NPI in JPY terms outperformed IPO forecasts by ~2.5%. However, the weaker JPY vs S$ has had a drag on earnings in S$ terms.
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  • JPY depreciated by ~18% against the S$ y-o-y.
• On a positive note, Daiwa House Logistics Trust's finance expenses were ~21.7% lower than IPO forecasts, also due to FX.
• DPU of 5.70 cents for the period (26 Nov 2021-31 Dec 2022) was above our expectations. Excluding the additional one-month contribution, 2H22 DPU would have only been ~1.5% lower. See Daiwa House Logistics Trust's dividend dates.

Positive rental reversions continued; portfolio occupancy remains very healthy

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• Daiwa House Logistics Trust's portfolio occupancy was maintained at a very strong 98.6%. Portfolio WALE is 6.4 years. 15 out of 16 properties are 100% occupied. Only vacancy is at DPL Koriyama (occupancy rate of 82.3%).

Borrowing costs maintained at 0.99% with all loans hedged to fixed rates

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Dale LAI DBS Group Research | Derek TAN DBS Research | https://www.dbs.com/insightsdirect/ 2023-02-24 SGinvestors.io

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