Unless otherwise stated, all capitalized terms used in this announcement shall have the same meaning as in the Prospectus.

Transcription

1 Cache Logistics Trust Unaudited Financial Statements & Distribution Announcement for the period from 11 February 2010 (date of constitution) to 31 December 2010 INTRODUCTION Cache Logistics Trust ( Cache ) is a Singapore-based real estate investment trust constituted by the Trust Deed entered into on 11 February 2010 (as amended) between ARA-CWT Trust Management (Cache) Limited as the Manager and HSBC Institutional Trust Services (Singapore) Limited as the Trustee to invest in income-producing real estate predominantly used for logistics purposes in Asia-Pacific 1, as well as real estate-related assets. Cache was a dormant private trust from the date of constitution until the Properties were acquired on 12 April Cache was officially listed on the same day ( Listing Date ) on the Singapore Exchange Securities Trading Limited ( SGX-ST ). The initial portfolio of properties comprises six high quality logistics warehouse properties located in Singapore, with an aggregate gross floor area of approximately 3.9 million sq ft. These properties are (i) CWT Commodity Hub, (ii) CWT Cold Hub, (iii) Schenker Megahub, (iv) C&P Changi Districentre, (v) Hi- Speed Logistics Centre and (vi) C&P Changi Districentre 2. The current distribution policy is to distribute 100% of its taxable income and tax-exempt income for the period from the Listing Date to 31 December 2011 and thereafter, to distribute at least 90% of its taxable and tax-exempt income. The financial information for the period from 11 February 2010 to 31 December 2010 has not been audited but has been reviewed by our auditors in accordance with Singapore Standard on Review Engagements Unless otherwise stated, all capitalized terms used in this announcement shall have the same meaning as in the Prospectus. 1:For purposes of the investment mandate of Cache, Asia-Pacific is defined as Singapore, Malaysia, Indonesia, Philippines, Thailand, Vietnam, China, India, Hong Kong, Macau, Taiwan, Japan, Korea, Australia and New Zealand.

2 SUMMARY OF RESULTS FOR CACHE LOGISTICS TRUST 1/10/10 to 31/12/10 11/2/10 to 31/12/10 (a) Gross revenue 14,748 42,444 Net property income 14,350 41,360 Income available for distribution 12,304 35,440 Distribution per unit ("DPU") (cents) (b) Annualised DPU (cents) Notes: (a) Cache was a dormant private trust from the date of constitution until the Properties were acquired on 12 April 2010 and was officially listed on the same day on SGX-ST. Consequently, the operations of the Trust commenced from 12 April There are no comparatives for the corresponding period of the immediately preceding financial year. As disclosed in the prospectus dated 1 April 2010 ( the Prospectus ), the SGX-ST has granted Cache a waiver from the requirement to prepare historical pro forma financial statements. However, where appropriate, comparisons are made against the pro-rated forecast figures for the period from 12 April 2010 (Listing date) to 31 December 2010 (the Forecast ) as disclosed in the Prospectus. (b) Please refer to Item 6 on Page 11 for the DPU computation. 2

3 1 (a)(i) Statement of Total Return and Distribution Statement for the period from 11 February 2010 to 31 December /10/10 to 11/2/10 to 31/12/10 31/12/10 (a) Statement of Total Return Gross revenue (b) 14,748 42,444 Property expenses (c) (398) (1,084) Net property income 14,350 41,360 Net financing costs (d) (1,946) (6,056) Manager's fees (1,163) (3,346) Trustee's fees (57) (163) Other trust expenses (219) (596) Net income 10,965 31,199 Net change in fair value of investment properties (e) 2,800 30,800 Total return for the period before taxation and distribution 13,765 61,999 Income tax expense (f) - - Total return for the period after taxation before distribution 13,765 61,999 1/10/10 to 11/2/10 to 31/12/10 31/12/10 (a) Distribution Statement Total return for the period after taxation before 13,765 61,999 distribution Non-tax deductible/(chargeable) items: Manager's fees paid/payable in units 872 2,510 Amortisation of transaction costs (h) 438 1,241 Swaption premium (h) Net change in fair value of investment properties (e) (2,800) (30,800) Other items Net effect of non-tax chargeable expenses (1,461) (26,559) Income available for distribution to Unitholders (g) 12,304 35,440 3

4 Notes : (a) Cache was a dormant private trust from the date of constitution until the Properties were acquired on 12 April As such, there was no comparative Statement of Total Return and Distribution Statement for the corresponding period of the immediately preceding financial year. (b) Gross revenue comprises rental income from the Properties. The acquisition of the Properties was completed on 12 April 2010, and Cache was officially listed on the SGX-ST on the same day. Consequently, the operations of the Trust commenced from 12 April (c) Property expenses comprise the property management fee and reimbursable expenses payable to Property Manager. (d) Included in the Net financing costs are the following: 1/10/10 to 11/2/10 to 31/12/10 31/12/10 (a) Finance income : Interest income Finance expenses : Interest expense : Bank loan (1,173) (3,527) Interest rate swap (345) (898) Amortisation of transaction costs (h) (438) (1,241) Swaption premium (h) - (413) Net financing costs (1,946) (6,056) (e) The Investment properties were revalued on 31 December 2010 by Knight Frank Pte Ltd. (f) The current distribution policy is to distribute 100% of its income available for distribution after adjustments for nontax deductible and non-tax chargeable items, hence there is no income tax expense. (g) The current distribution policy is to distribute 100% of its taxable income and tax-exempt income for the period from the Listing Date to 31 December 2011 and thereafter, to distribute at least 90% of its taxable and tax-exempt income. The dividends will be distributed on a quarterly basis, no later than 60 days after the end of each distribution period. (h) Amortisation of transaction costs represents amortisation of upfront fees on credit facilities. Swaption premium represents fees paid to the banks for entering into an option to exercise a plain vanilla interest rate swap on Listing Date at a pre-agreed interest rate. These items are non-tax deductible and have no impact on income available for distribution.. 4

5 1 (b)(i) Balance Sheet as at 31 December 2010 As at 31/12/10 (a) Non-current assets Investment properties (b) 744,000 Plant and equipment 113 Total non-current assets 744,113 Current assets Trade and other receivables 69 Cash and cash equivalents 7,996 Total current assets 8,065 Total assets 752,178 Current liabilities Trade and other payables (3,135) Total current liabilities (3,135) Non-current liabilities Interest bearing borrowings (c) (172,658) Derivative liabilities (d) (1,267) Total non-current liabilities (173,925) Total liabilities (177,060) Net assets 575,118 Represented by: Unitholders' funds (e) 575,118 Notes: (a) Cache was a dormant private trust from the date of constitution until the Properties were acquired on 12 April As such, there was no comparative Balance Sheet as at the immediately preceding financial year end. (b) The carrying amounts of the investment properties as at 31 December 2010 were based on independent valuation undertaken by Knight Frank Pte Ltd. (c) Comprised principal amount of borrowings of S$178 million, after deducting unamortized capitalised upfront fees of S$5.3 million. (d) Derivative liabilities relate to the fair value of the 2-year plain vanilla interest rate swap to hedge the interest rate risk on S$160 million of the term loan facility. (e) Please refer to the Statement of Movements in Unitholders Funds Item (1)(d)(i) on Pg 8 for details. 5

6 1 (b)(ii) Aggregate amount of borrowings and debt securities As at 31/12/10 (a) Secured Unsecured Amount repayable within one year - - Amount repayable after one year 177, ,985 - Less : Unamortized capitalised upfront fees (5,327) - 172,658 - Note : (a) Cache was a dormant private trust from the date of constitution until the Properties were acquired on 12 April As such, there was no comparative figures as at the immediately preceding financial year end. Details of borrowings and collaterals Cache has in place 4-year secured facilities comprising S$178 million term loan facility ( TLF ) and a S$25 million revolving credit facility ( RCF ). As at reporting date, the full amount of the TLF has been drawn. The facilities are secured by way of: A first mortgage over the initial portfolio of properties ( Properties ); A debenture creating fixed and floating charges over all assets as at the date of the Initial Public Offering ( IPO ) and/or in relation to the Properties; An assignment of all leases, sale agreements and banker s guarantees in relation to the Properties and bank accounts as at the date of the IPO; An assignment of all insurance policies in relation to the Properties; and An assignment of Cache s rights in the corporate guarantees given in respect of certain properties. 6

7 1 (c) Statement of Cash Flows 11/2/10 to 31/12/10 (a) Operating activities Net income 10,965 31,199 Adjustments for: Manager's fees paid/payable in units 872 2,510 Depreciation 2 3 Net financing costs 1,946 6,056 Changes in working capital : Trade and other receivables (5) (68) Trade and other payables 690 1,887 Net cash from operating activities 14,470 41,587 Cash flows from investing activities Interest received 9 22 Purchase of investment properties (d) - (713,200) Purchase of plant and equipment (111) (116) Net cash used in investing activities (102) (713,294) Cash flows from financing activities 1/10/10 to 31/12/10 Proceeds from issue of new units (b) - 556,336 Proceeds from borrowings (b) - 190,985 Repayment of borrowings - (13,000) Issue expenses paid (c), (d) - (21,274) Interest paid (1,552) (3,300) Financing costs paid (d) - (6,908) Distribution to unitholders (23,136) (23,136) Net cash (used in)/from financing activities (24,688) 679,703 Net (decrease)/increase in cash and cash equivalents (10,320) 7,996 Cash and cash equivalents at beginning of the period 18,316 - Cash and cash equivalents at end of the period 7,996 7,996 Notes : (a) Cache was a dormant private trust from the date of constitution until the Properties were acquired on 12 April As such, there was no comparative Statement of Cash Flows for the corresponding period of the immediately preceding financial year. (b) The proceeds from issue of new units and borrowings were used substantially for the purchase of investment properties, payment of issue expenses and financing costs. (c) Issue expenses comprised professional and other fees, underwriting and selling commission and miscellaneous issue expenses. (d) These payments were in line with the intended applications as stated in the Prospectus dated 1 April

8 1 (d)(i) Statement of Movements in Unitholders Funds 1/10/10 to 31/12/10 11/2/10 to 31/12/10 (a) Balance at the beginning of the period 583,366 - Operations Total return after tax 13,765 61,999 Net increase in net assets resulting from operations 597,131 61,999 Hedging transactions (b) 251 (1,267) Unitholders' transactions Creation of units - Issue of new units - 556,336 - Manager's fees paid in units - 1,638 Issue expenses (c) - (21,324) Units to be issued - Manager's fees payable in units (d) Distributions to unitholders (23,136) (23,136) Net (decrease)/increase in net assets resulting from (22,264) 514,386 unitholders' transactions Unitholders' funds at end of period 575, ,118 Notes: (a) Cache was a dormant private trust from the date of constitution until the Properties were acquired on 12 April As such, there was no comparative figures for the corresponding period of the immediately preceding financial year. (b) This relates to the effective portion of the change in fair value of the 2-year plain vanilla interest rate swap designated as cashflow hedge. (c) Issue expenses comprised professional and other fees, underwriting and selling commission and miscellaneous issue expenses. The expenses have been substantially paid. (d) This represents the value of units to be issued to the Manager as partial consideration of the manager s fees incurred for the quarter. The units are to be issued within 30 days from quarter end. 8

9 1 (d)(ii) Details of any changes in the units 1/10/10 to 31/12/10 Units 11/2/10 to 31/12/10 (a) Units Issued units at the beginning of the period 633,862,855 - Creation of units : - Issue of new units - Units issued as partial settlement for the acquisition of Investment Properties - 89,286,000 - Private Placements (b) - 68,806,000 - Initial Public Offering - 474,108,000 - Manager's fees paid in units - 1,662,855 Issued units at the end of the period 633,862, ,862,855 Units to be issued: - Manager's fees payable in units (c) 911, ,211 Total issued and to be issued units 634,774, ,774,066 Notes: (a) Cache was a dormant private trust from the date of constitution until the Properties were acquired on 12 April As such, there was no comparative figures for the corresponding period of the immediately preceding financial year. (b) Comprises 56,901,000 Cornerstone Units and 11,905,000 Units subscribed by ARA Real Estate Investors V Limited, an indirect wholly-owned subsidiary of ARA Asset Management Limited. (c) These are additional units to be issued to the Manager as partial consideration of manager s fees incurred for the quarter. The units are to be issued within 30 days from the quarter end. 1 (d)(iii) A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at the end of the current financial period reported on. Not applicable 9

10 2. Whether the figures have been audited, or reviewed and in accordance with which standard (e.g. the Singapore Standard on Auditing 910 (Engagements to Review Financial Statements), or an equivalent standard) The figures for the period from 11 February 2010 to 31 December 2010 have not been audited but have been reviewed by the auditors in accordance with Singapore Standard on Review Engagements 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. 3. Where the figures have been audited, or reviewed, the auditors' report (including any qualifications or emphasis of matter) Please see attached review report. 4. Whether the same accounting policies and methods of computation as in the issuer's most recently audited financial statements have been applied Cache has applied the same accounting policies and methods of computation as in the Prospectus dated 1 April If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change There is no change in the accounting policies and methods of computation adopted. 6. Earnings per unit ( EPU ) and Distribution per unit ( DPU ) for the financial period Earnings per unit 1/10/10 to 31/12/10 11/2/10 to 31/12/10 (a) Weighted average number of units 633,872, ,059,360 Earnings per unit for the period based on the weighted average number of units in issue (cents) (b) Notes: (a) Cache was a dormant private trust from the date of constitution until the Properties were acquired on 12 April As such, there was no comparative figures for the corresponding period of the immediately preceding financial year. (b) The EPU calculation uses the total return for the period after tax, and the weighted average number of units issued and to be issued. The diluted EPU is the same as basic EPU as no dilutive instruments were in issue during the period. 10

11 Distribution per Unit In computing the DPU, the number of units as at the end of each period is used for the computation. 1/10/10 to 31/12/10 11/2/10 to 31/12/10 (a) Number of units issued and to be issued at end of period entitled to distribution (b) 634,774, ,774,066 Distribution per unit for the period based on the total number of units entitled to distribution (cents) (c) Notes: (a) Cache was a dormant private trust from the date of constitution until the Properties were acquired on 12 April As such, there was no comparative figures for the corresponding period of the immediately preceding financial year. The operations of the Trust commenced from 12 April 2010 and the income derived for the period was from 12 April 2010 to 31 December (b) The computation of DPU for the period from 1 October 2010 to 31 December 2010 is based on the number of units entitled to distribution : (i) The number of units in issue as at 31 December 2010 of 633,862,855 ; and (ii) The units to be issued to the Manager by 28 January 2011 as partial consideration of manager s fees incurred for the period 1 October 2010 to 31 December 2010 of 911,211. (c) The DPU for the period from 12 April 2010 to 31 December 2010 comprised cents paid on 29 November 2010 and cents payable on 1 March Net asset value ( NAV ) per unit at the end of current period As at 31/12/10 (a ) NAV per unit (S$) (b) 0.91 Notes: (a) Cache was a dormant private trust from the date of constitution until the Properties were acquired on 12 April As such, there was no comparative figures as at the immediately preceding financial year end. (b) The number of units used to compute NAV per unit is 634,774,066. This comprised : (i) The number of units in issue as at 31 December 2010 of 633,862,855 ; and (ii) The units to be issued to the Manager by 28 January 2011 as partial consideration of manager s fees incurred for the period 1 October 2010 to 31 December 2010 of 911,

12 8. Review of the performance for the fourth quarter and period from 11 February 2010 to 31 December 2010 Please refer to section 9 on the review of performance against the pro-rated forecast figures per the Prospectus for the period. 9. Variance between the forecast and actual results 1/10/10 to 31/12/10 Fav/ 11/2/10 to 31/12/10 (a) Fav/ Actual Forecast (b) (Unfav) Actual Forecast (b) (Unfav) % % Gross revenue 14,748 14,748-42,444 42, Property expenses (398) (390) (2.1) (1,084) (1,123) 3.5 Net property income 14,350 14,358 (0.1) 41,360 41, Net financing costs (1,946) (2,066) 5.8 (6,056) (6,681) 9.4 Manager's fees (1,163) (1,130) (2.9) (3,346) (3,254) (2.8) Trustee's fees (57) (54) (5.6) (163) (156) (4.5) Other trust expenses (219) (250) 12.4 (596) (718) 17.0 Net income 10,965 10, ,199 30, Net change in fair value of investment properties 2,800 - nm 30,800 16, Total return for the period before 13,765 10, ,999 47, taxation and distribution Income tax expense Total return for the period after 13,765 10, ,999 47, taxation before distribution Distribution adjustments (1,461) 1,309 nm (26,559) (12,213) (117.5) Income available for distribution 12,304 12, ,440 35, nm not meaningful Notes : (a) Cache Logistics Trust was constituted on 11 February 2010 and was a dormant private trust from the date of constitution to 11 April The acquisition of the Properties was completed on 12 April 2010, which was the day it was officially listed on the SGX-ST. Consequently, the operations of the Trust commenced from 12 April (b) The Forecast figures are extracted from the Prospectus dated 1 April 2010 and pro-rated for the period, except for the change in fair value of investment properties and transaction cost relating to an interest rate swap which are not pro-rated. Review of performance for the fourth quarter Gross revenue and net property income for the quarter ended 31 December 2010 of S$14.7 million and S$14.4 million respectively were in line with the Forecast. Net financing costs was 5.8% or S$0.1 million lower than forecast due to lower all-in average interest rate achieved. For the quarter, the overall weighted average all-in financing costs was 4.36% as compared to forecast of 4.50% and the gearing ratio stood at 23.7% as at 31 December

13 Other trust expenses were 12.4% lower than forecast due to lower trust expenses incurred. Consequently, the S$12.3 million Income available for distribution exceeded forecast by 1.1%. Review of performance for 31 December 2010 Gross revenue and net property income for the period ended 31 December 2010 of S$42.4 million and S$41.4 million respectively were in line with the Forecast. Net financing costs was 9.4% or S$0.6 million lower than forecast due to lower all-in average interest rate achieved and lower swaption premium incurred. The overall weighted average all-in financing costs was 4.28% as compared with forecast of 4.50%. Other trust expenses were 17.0% lower than forecast due to lower trust expenses incurred. Income available for distribution of S$35.4 million exceeded forecast of S$35.0 million. 10. Commentary on the competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months. The Singapore economy is projected to grow at a steady pace of 4 to 6 per cent in 2011, following the record 14.7 per cent expansion in The positive outlook is underpinned by the strength of regional economies which will drive intra-regional trade in goods and services, as well as capacity additions in the manufacturing sector and progressive offerings of recreational facilities in the tourism-related services industries, according to the Ministry of Trade and Industry. On the back of Singapore s robust economic performance in 2010, the industrial property market has been on an uptrend since it bottomed out in 3Q According to URA s 3Q 2010 statistics, the rental index for warehouse space gained 8.1% to 86.7 during the first nine months of 2010, while the price index increased by 13.9% to over the same period. Occupancy rate strengthened to 91.3% compared to 90.0% as at end-december Looking ahead, the demand for logistic properties in Singapore is expected to remain firm underpinned by sound economic fundamentals and favorable outlook for the regional economies. Furthermore, with net new supply of warehouse space projected to slow down to 131,000 sq m per annum between 2011 and 2014, compared to 176,000 sq m yearly between 2000 and 2009, occupancy rates are expected to continue to strengthen, according to Colliers International 1. The Cache portfolio comprising six quality logistics properties located in Singapore is expected to continue its steady performance. The portfolio is 100% occupied with triple-net master lease structures and locked-in annual rental escalations in place. The master lease structure, with a weighted average lease to expiry of 5.8 years as at 31 December 2010, provides a high degree of predictability in cash flow and stability in earnings for the portfolio. Against a backdrop of positive regional economic outlook, the Manager is actively seeking accretive acquisitions as an integral part of Cache s investment strategy to deliver sustainable distributions and growth to its Unitholders. With a strong balance sheet and a conservative gearing of 23.7%, Cache is on a strong footing to execute this strategy. At the same time, the Manager will continue to work with the master lessees to explore asset management opportunities to attract quality long-term end-users, an area where it has achieved some success as was reported in the recent two leasing accomplishments at the CWT Commodity Hub. Barring any unforeseen circumstances, the Manager of Cache is confident of delivering the forecast distribution per unit for FY2011 as stated in the Prospectus dated 1 April Colliers International, Asia Pacific Logistics Property Market Report, 14 January 2011 (report is based on URA data as of 3Q 2010) 13

14 11. Distributions (a) Current financial period Any distribution declared for the current period? Yes Name of distribution: Distribution Type: Par value of units: Tax rate: Distribution for the period from 1 October 2010 to 31 December 2010 Taxable income distribution cents per unit Not meaningful Taxable Income These distributions are made out of Cache s taxable income. Unitholders receiving distributions will be assessable to Singapore income tax on the distributions received except for individuals where these distributions are exempt from tax. Distributions made to individuals, irrespective of their nationality or tax residence status, who hold the units as investment assets will be tax exempt. However, distributions made to individuals who hold units as trading assets or through a partnership will be taxed at the level of these individuals at their applicable income tax rates. All unitholders who are not individuals are subject to Singapore income tax / withholding tax on distributions of Cache. (b) Corresponding period of the immediately preceding financial year Any distribution declared for the current period? Not applicable (c) Date Payable 1 March 2011 (d) Books Closure Date 8 February If no distribution has been declared/(recommended), a statement to that effect Not applicable. 14

15 13. Segmented revenue and results for business or geographical segments (of the Trust) in the form presented in the issuer s most recently audited annual audited financial statements, with comparative information for the immediately preceding year. The Trust only has one operating segment, comprising of logistics warehouse properties located in Singapore under triple-net master lease agreements. 14. In review of performance, the factors leading to any changes in contributions to turnover and earnings by the business or geographical segments Please refer to Section 9 for the review of the actual performance. 15. Breakdown of sales 11/2/10 to 31/12/10 (a) Gross revenue reported for period from 12 April 2010 to 30 June ,946 Net property income reported for period from 12 April 2010 to 30 June ,648 Gross revenue reported for period from 1 July 2010 to 31 December ,498 Net property income reported for period from 1 July 2010 to 31 December ,712 Note: (a) Cache was a dormant private trust from the date of constitution until the Properties were acquired on 12 April 2010 and was officially listed on the same day on SGX-ST. Consequently, the operations of the Trust commenced from 12 April

16 16. Breakdown of the total distribution for the period from 11 February 2010 to 31 December 2010 Annual distribution made to Unitholders 11/2/10 to 31/12/10 (a) In respect of the period: 12 April 2010 to 30 September ,136 1 October 2010 to 31 December 2010 (b) - 23,136 Note: (a) Cache was a dormant private trust from the date of constitution until the Properties were acquired on 12 April 2010 and was officially listed on the same day on SGX-ST. Consequently, the operations of the Trust commenced from 12 April (b) Refer to distribution on item 11(a) on Page 14. On behalf of the Board of the Manager ARA-CWT TRUST MANAGEMENT (CACHE) LIMITED Lim How Teck Director Lim Hwee Chiang Director 16

17 This release may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from similar developments, shifts in expected levels of property rental income, changes in operating expenses (including employee wages, benefits and training costs), property expenses and governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. Investors are cautioned not to place undue reliance on these forward-looking statements, which are based on the current views of management on future events. The value of units in Cache ( Units ) and the income derived from them, if any, may fall or rise. Units are not obligations of, deposits in, or guaranteed by, ARA-CWT Trust Management (Cache) Limited (as the manager of Cache) (the Manager ) or any of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested. Investors should note that they will have no right to request the Manager to redeem or purchase their Units for so long as the Units are listed on Singapore Exchange Securities Trading Limited (the SGX-ST ). It is intended that holders of Units may only deal in their Units through trading on the SGX-ST. The listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. The past performance of Cache is not necessarily indicative of the future performance of Cache. BY ORDER OF THE BOARD ARA-CWT TRUST MANAGEMENT (CACHE) LIMITED AS MANAGER OF CACHE LOGISTICS TRUST (Company registration no H) Lim Hwee Chiang Director 27 January

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