New Reit hoping to raise $400m

Cache Logistics Trust prospectus says 474.2m units will be offered at 84-88 cents each

CACHE Logistics Trust has lodged its listing prospectus with the Monetary Authority of Singapore, revealing that the new Reit hopes to raise about $400 million through its IPO.

According to the prospectus, Cache is offering 474.2 million units at 84 to 88 cents each.

A distribution yield in the range of 8.82-9.08 per cent has been forecast for 2011, depending on the issue price.

Cache is managed by ARA-CWT Trust Management (ACT) which is 60 per cent owned by ARA Asset Management Ltd and 40 per cent by CWT Ltd.

Daniel Cerf, formerly deputy chief executive of K-Reit Asia Management is ACT’s CEO. Mr Cerf, a licensed architect in the US, was previously general manager of special duties at Keppel Land.

Lim How Teck, who recently resigned as non-executive independent director of AIMS AMP Capital Industrial Reit Management, is ACT’s chairman and non-executive director.

Cache is a Singapore-based Reit and will principally invest in logistics properties in the Asia-Pacific as well as real estate-related assets.

Its initial portfolio of properties consists of six logistics warehouse properties in Singapore with an aggregate gross floor area (GFA) of 3.86 million square feet and a value of about $730 million.

The properties are CWT Commodity Hub, CWT Cold Hub, Schenker Megahub, C&P Changi Districentre, Hi-Speed Logistics Centre and C&P Changi Districentre. The properties are part of a sale and leaseback agreement entered by Cache with CWT and C&P Holdings respectively.

According to the prospectus, the initial portfolio is 94.1 per cent occupied by and contracted to 262 end-users comprising domestic and international companies.

The largest end-user accounts for 16.1 per cent of the total GFA of the initial portfolio. The top five end-users together account for 56.5 per cent of the occupied GFA.

CWT and C&P Holdings are the master lessees for these properties. Of the occupied GFA, 79.1 per cent is occupied by direct counterparties of the master lessees being third-party logistics service providers and third-party end-users.

The remaining 20.9 per cent of the occupied GFA is contracted from the master lessees by CWT related entities, which has in turn been fully contracted for use by third-party end-users.

C&P Holdings is a significant shareholder of CWT with a stake of 35.9 per cent.

The master lease agreements provide for lease durations ranging from five to 10 years and a weighted average lease expiry of 6.4 years, with locked-in annual rental escalations and a triple net lease structure for the first five years of the initial contracted lease term.

CWT and C&P has granted right of first refusal to Cache, providing the Reit with access to future acquisition opportunities. As at Dec 31, 2009, there are 11 properties totalling 2.3 million sq ft of GFA currently owned by CWT in Singapore, China and Vietnam and two income-producing properties totalling over 723,651 sq ft of GFA currently owned by C&P in Singapore of which Cache has first right of refusal.

Source: Business Times, 20 Mar 2010