Daiwa House Logistics Trust H1 DPU drops 8.6% to S$0.0224

The manager of Daiwa House Logistics Trust (DHLT) on Friday (Aug 8) posted a distribution per unit (DPU) of S$0.0224 for its first half ended Jun 30, down 8.6 per cent from S$0.0245 in the previous corresponding period.

This was attributed to higher interest expenses and lower realised exchange gains.

The higher interest expenses came mainly from new borrowings drawn for acquisitions and a higher interest rate, as a result of the refinancing and restructuring of onshore yen borrowings in November 2024, said the manager.

Net property income (NPI) for the period stood at S$22.5 million, up 6.1 per cent from S$21.2 million previously, in light of the contributions from D Project Tan Duc 2 in Vietnam and newly added freehold logistics property DPL Gunma Fujioka in Japan.

Gearing stood at 40.7 per cent as at Jun 30, with a weighted average lease expiry of 6.5 years. The interest coverage ratio, including distribution for perpetual securities, was 6.6 times, and portfolio occupancy was 93.2 per cent.

For the Japan portfolio, NPI in yen terms declined 0.5 per cent this half year to 2.39 billion yen (S$20.8 million) from 2.4 billion yen in the corresponding year-ago period, as contributions from DPL Gunma Fujioka, DPL Ibaraki Yuki and DPL Kawasaki Yako were offset by vacancies and higher property-related expenses.

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Gross rental income in yen was 1.1 per cent higher at 2.8 billion yen for the period, from 2.77 billion yen.

The manager warned that the new supply of logistics space in Japan is expected to decline due to rising costs of construction and land, though the fundamentals of the Japan logistics market are expected to remain strong. However, industries such as e-commerce are expected to still have demand.

As for Vietnam, its other market, DHLT’s manager said occupancy rates for industrial and logistics facilities generally improved because of the growing economy and e-commerce activities.

Jun Yamamura, chief executive of the manager, said: “Apart from the vacated space in DPL Sendai Port, leasing activities have been healthy in H1 FY2025... We will continue to work on the remaining vacant space in DPL Koriyama and DPL Sendai Port.”

The manager also stated that US trade policy is likely to bring about near-term uncertainty, even as long-term fundamentals of the logistics sectors in DHLT’s operating markets remain healthy.

“We remain vigilant over the near-term market uncertainties as we continue to focus on improving the occupancy of the portfolio,” said Yamamura.

Units of DHLT closed 0.9 per cent or S$0.005 higher at S$0.575 on Thursday.