The outlook is stable. While the manager did not disclose the rental reversions during the quarter, we think it is reasonable to assume it was high single-digit negative or worse. Nonetheless, the portfolio is expected to be stable for the remainder of the year, with renewal risk limited to 6.7% of GRI against a backdrop of tapering supply of new space. Positive catalyst from the utilisation of available debt headroom to acquire; and negative surprise from worse than expected demand for space, delaying the recovery in rents.
Maintain Accumulate; unchanged target price of $0.91
No changes to our estimates. Our target price represents an implied 1.28x FY18e P/NAV multiple.
Cache Logistics Trust is fairly valued relative to logistics peers in terms of P/NAV multiple. But it has a higher than average trailing yield, which suggests that there is room for yield to compress.