Burgeoning warehouse supply in 2015 threatens Cache Logistics Trust’s portfolio

Despite efforts to secure renewals for expiring leased areas.

CACHE’s portfolio occupancy was steady at 99.5% (2Q14: 99.6%), while balance sheet remains healthy with a gearing ratio of 28.8%, as at 30 Sep 2014.

However, an analyst from OCBC cautions that the large supply of warehouses coming into the market in 2015 still provides a cause of concern. 

Approximately 24% of CACHE’s leased area will expire in FY15. While OCBC appreciates management’s efforts to actively secure forward renewals in advance (expiry profile was 34% at start of the year), This situation may be exacerbated by CACHE’s strategy to transit to a more multi-tenanted lease profile going forward to reduce its concentration risk.