REITs and rights issues: Good at the right price.

Reader:
Can I ask u a question regarding to recently cache log have issue a right maybe know is it this right can be convert able into share when expired?

AK:
Once they have expired, rights are worthless.





Reader:
Alamak
Did u know when is expired date? Pls
And How do I sell off

AK:
It has already expired.

Reader:
Alamak like that mean nothing can I do with it?

AK:
I blogged about this. I even posted a reminder on my FB wall. 😉
All instructions and closing date in the package sent out by the CDP too.




Please be very careful and take note of all the dates when there are rights issues.

Exercise your rights to avoid dilution and, possibly, a big decline in distribution yield before the closing date.

How did Cache Logistics Trust's rights issue turn out for me?

I took up my entitlement and also subscribed for excess rights, receiving 40% more rights units than my entitlement as a result.




All investments are good at the right price and because heavily discounted rights units give the highest yields, unless it is a basket case, applying for as many excess rights as I can afford to makes sense to me.

Read this blog from earlier today?
Is AK the investor right 6x out of 10x?

Related posts:
1. Nil-paid rights and excess rights. 
2. Cache Logistics Trust 18 for 100 rights issue.

Cache Logistics Trust 18 for 100 Rights Issue.

It has been many years since I blogged about Cache Logistics Trust in more detail. 

After partially divesting my investment in the Trust a few years ago, I have not really looked at it as I decided back then that they were not friendly to retail investors like me.

Many share placements over the years have diluted the NAV per unit and although total revenue has increased, DPU has reduced. For a retail investor (for income), it is not good for me.




I searched my blog's archives and the last time I really blogged about Cache Logistics Trust was in 2012. 

NAV per unit was 90c then in 2Q 2012. 

It was 77c in 2Q 2017.

DPU was 1.981c then in 2Q 2012. 
It was 2.086c the quarter before. 

It was 1.8c for 2Q 2017.

Gearing level was at 27.5% then in 2Q 2012. 

It was 43.4% in 2Q 2017.

Interest cover ratio was 7.5x then in 2Q 2012. 

It was 4.0x in 2Q 2017.

With gearing level much elevated, some form of equity fund raising is not unexpected. 





The manager did say in their 2Q 2017 presentation that they wished to achieve a lower leverage ratio and the Trust just announced an 18 for 100 rights issue at 63.2 cent per rights unit.

See 2Q 2017 presentation: HERE.

I have said before that I like rights issues if funds are being used to generate more income and hopefully they are DPU accretive. 

However, rights issues to strengthen the balance sheet means a lower DPU and we should expect DPU to drop by a few per cent after this rights issue is over, everything else remaining equal. 

Yes, this rights issue is to strengthen the Trust's balance sheet.





After suffering a string of dilution in the value of their investment in the Trust and receiving lower DPU over time, now, retail investors are being asked to cough up some of those reduced distributions they received to help strengthen the balance sheet. 

Why don't they do another private placement which was something they did so well before?

OK. I know. I am complaining. 

Hey, I am Singaporean!

Complaining is something I can do quite well but I like to think that I am not being unreasonable.

Anyway, after the rights issue, gearing level will reduce significantly from 43.4% to 35.5%. 

Let us hope they do not squander a stronger balance sheet. Crossing fingers (and toes).

See announcement: HERE.
See time table: HERE.

Related post:
Cache Logistics Trust 2Q 2012 DPU reduced.

Bought more VIVA Industrial Trust and worried.

Reader:
I learn of your blog from reading an article you wrote about Viva Industrial Trust for a magazine. 

I am very concerned now because I just bought more after reading research provided by my broker. 

The dividend is expected to increase. 

Is the land lease situation really bad?







60 years land lease from 1961.
Expiring in 2020, no extension is allowed.

AK:
I don't remember writing for any magazine or maybe I did but I just don't remember.

Whether an investment is good or not depends in part on the motivation of the investor. 

If you are invested in Viva Industrial Trust for income, you have to question not only how high the yield is, you have to question how sustainable it is going to be?





Can there be any other motivations for investing in Viva Industrial Trust? 

The belief that, perhaps, the manager could increase asset value and to sell assets to an unsuspecting (or gullible) party at a higher price before the land leases end? 

Of course, this would make the decision more a speculation than an investment.

I know what I have said does not sit well with everybody and I can even prove it. ;p

Hey, I am only a blogger and I anyhow talk to myself in my blog lah. 






Don't care me hor.

Listen to John Lim better. 

Who is John Lim? Who else?

In an interview, John Lim said there is an issue with the structure of the Singapore industrial property market. The land tenures are relatively short and valuations will fall because they are aligned to tenure. 

Not I say. 

John Lim say hor.






This is why Cache Logistics Trust is diversifying into Australia. 

Incidentally, so has AIMS AMP Capital Industrial REIT. 

Of course, we also have a new comer, Frasers Logistics and Industrial Trust which is a pure Australian play.

Related posts:
1. VIVA Industrial Trust's 9% yield.
2. AA, Soilbuild and VIVA REITs. 

First REIT: DPU increased 16.7% to 1.96c.

On 26 July, I blogged about a 16.4% increase in First REIT's DPU. That was due primarily to contributions from 4 newly acquired properties. So, a continuation of the higher DPU through the quarter that ended 30 September should not come as a surprise.

Sometimes, in REITs, we see increases in net property income and distributable income but a lower or stagnant DPU. Of course, if the gearing level should be significantly reduced, it could be acceptable. Otherwise, all else being equal, it just means that we had an incompetent management.

When I initially invested in First REIT years ago, it had a relatively low gearing ratio. It was a bit more than 10%. Now, it is above 30%. So, the higher DPU has been achieved by leveraging up. Now, I am not saying that this is a bad thing.

However, to continue growing through acquisitions is going to be more difficult especially because the management wants to keep gearing at around 30%. This was also why I cautioned in an earlier blog post that we could expect a private placement if there should be another acquisition in the pipeline.

With the management saying that they are exploring AEIs to enhance income stream and to maximise returns to unitholders instead, the prospect of having a private placement is much weaker now. I view this as a good thing.

To have a private placement in order to strengthen the balance sheet making an acquisition or development less onerous might or might not result in a higher DPU. In the case of AIMS AMP Capital Industrial REIT, DPU improved while in the case of Cache Logistics Trust, DPU declined although marginally. So, in the case of First REIT, since we have a good thing in hand, why change it? The status quo is fine by me.

The CEO of First REIT's manager, Dr. Ronnie Tan, has a reputation for accumulating the REIT's units at all price levels. His interests are more aligned with unitholders', therefore. So, this is, perhaps, a reason why First REIT has been such a good investment for retail investors.

Related posts:
1. First REIT: DPU increased 16.4% (Part 1).
2. First REIT: DPU increased 16.4% (Part 2).

3 Trusts in AK71's portfolio and their income distributions.

I am expected to be quite bogged down by work in the near term and it will probably be a good idea to get more sleep in the meantime. However, reading pages 6 and 7 of The Business Times just now perked me up and I just got to blog about it.

3 Trusts I am invested in have announced their DPU for the last quarter:

The star is AIMS AMP Capital Industrial REIT which, regular readers would know, is one of my two biggest investments in S-REITs, the other one being Sabana REIT. As per my expectations, the annualised DPU of the REIT is now 11c as it declared a DPU of 2.75c for the quarter ended 30 Sep 13.

There are plans to bump up DPU in the next 2 years through AEIs, acquisitions and by maximising plot ratios. I will temper my optimism because if the REIT should try to lower its gearing, it could do another private placement and this would water down any potential increase in DPU.

Cache Logistics Trust which most analysts seem to favour announced a lower DPU of 2.126c, down 0.8%, year on year. Not a big deal although a bit of growth would have been nice. This is especially when distributable income actually rose 9.6% to $16.5million.

DPU came in lower due to 70 million private placement units in March this year. Regular readers know that I much prefer rights issues to private placements since retail investors like me never get to buy discounted units at private placements.

The third Trust is Frasers Commercial Trust (FCOT). It announced a DPU of 2.08c which is some 18.9% higher, year on year. Lower finance costs and lesser payment to holders of its Convertible Perpetual Preferred Units (CPPUs) are what helped to boost DPU.

A rough back of the envelope calculation tells me that the income distributions for the quarter ended 30 Sep 13 from these 3 Trusts will form approximately 7% of my total passive income from S-REITs this year. This will be very useful for my first year end holiday with my family in 5 years. I am looking forward to spending some quality time with my family and taking a longish break from work.

Always good to have positive news to perk us up in life.

Related posts:
1. Cache Logistics Trust: Initiated long position.
2. FCOT: DPU up 16.8% in 18 months.
3. AIMS AMP Capital Industrial REIT: Making money.

Cache Logistics Trust: 4Q DPU 2.154c.

Full year distributable income improved 9.5% while full year net property income improved 11.7%.

However, full year DPU improved by a very much smaller 1.6%.

Why do investors like Cache Logistics Trust? Some reasons could be:

1. 100% occupancy rate.

2. Only 2% of lettable space is up for lease renewal this year.

3. Weighted average lease to expiry: 3.9 years.

At $1.27 per unit, annualised, distribution yield is 6.78%. This is much lower than Sabana REIT's but Cache Logistics Trust offers greater certainty and that alone would command a premium.

A more interesting question is whether the size of the premium is justifiable. That is another exercise in subjectivity.

Gearing is higher now at 31.7% which, however, is still comfortable.

Related post:
Cache Logistics Trust: DPU down 5%.

Cache Logistics Trust: 2Q 2012's DPU down 5%.

A drop in DPU? Yes, that is right. From 2.086c in the last distribution to 1.981c this time round.

This is due mainly to a private placement of 60 million units in March this year. This is an important reason why I prefer a rights issue to a private placement.

With a rights issue, all unitholders are given a chance to participate in the enlarged capital base of the REIT. With a private placement, retail investors are usually disadvantaged.

Although the DPU might still fall 5% if the REIT had a rights issue instead of a private placement, at least all unitholders would have had a chance to buy new units at a discount which would mean the distribution yields on their investments would be less affected negatively, if at all. Unitholders would also be able to benefit from the price appreciation of the rights units.

Well, it remains to be seen if the management is able to improve DPU in the coming quarters, raising it to the level before the private placement in March.

NAV/unit: 90c.
Gearing: 27.5%.
Interest cover ratio: 7.5x.

With gearing lower at 27.5%, new acquisitions could be in the pipeline.

See presentation slides: here.

Related post:
Cache Logistics Trust: 1Q 2012.

Cache Logistics Trust: 1Q 2012 DPU 2.086c.

It is no secret that I like industrial S-REITs as passive income generators. I am also vested in Cache Logistics Trust although my long position here is quite a bit smaller compared to my investments in Sabana REIT and AIMS AMP Capital Industrial REIT.

DPU for the quarter came in at 2.086 S cents and represented a 6.9% YoY increase. 

Income distribution is payable 30th of May 2012.

CACHE’s portfolio properties remained 100% occupied.

The weighted average lease expiry (WALE) stood at 4.4 years.

Aggregate leverage improved from 29.6% as at 31 Dec 2011 to 27.7%. This gives the REIT an estimated S$110m of additional debt headroom for future investment opportunities.

Interest cover maintained at a strong 8.0x.

Related post:
Cache Logistics Trust: 4Q and 2011 results.

See OCBC Research, 19 April:
Cache Logistics Trust: Positive start to FY12.

See presentation slides: here.

Cache Logistics Trust: Retreating to supports.

Cache Logistics Trust is a favourite of many REIT investors. It has also received many glowing reports from analysts. I also have a small long position in the REIT.

Today, a reader left a comment in my blog asking me if it is a good time to invest in the REIT as it closed at $1 a unit in the last session. Fundamentally, the REIT is a well run entity with 8.4% distribution yield per annum. If one is happy with its numbers, why not? Technically, however, I see possibly further weakness and there could be stronger supports at 98.5c and 97c.

I thought I would share in this blog how I arrived at these numbers.  Quite simply, I looked at the longer term chart, the weekly chart. Daily charts show shorter term price gyrations while weekly charts show possible longer term directions. The MAs on the weekly chart for a trending counter are likely to be stronger supports and resistance, therefore.

Notice how the black candles of the last two weeks formed on the back of increasing volumes? Positive momentum is obviously weakening and further weakness in price would not be surprising.

On the daily chart, the MACD is on the verge of entering negative territory. A return of negative momentum could send unit price lower. The Stochastics is upturning in negative territory. This suggests an oversold situation but if this momentum oscillator should turn up successfully, there could be support and downside could be limited. 98.5c or 97c in the near term? Possibly.

What is interesting to note is how the OBV has been declining which suggests distribution activity has been going on for some time. For sure, it did not happen in a straight line but the trend is clear. This signal suggests that we should exercise caution when initiating long positions. Better to err on the side of caution it would seem.

Related post:
Cache Logistics Trust: 4Q and FY2011 results.

OCBC Research: Industrial REITs.

I came across an interesting piece of research by OCBC on industrial REITs in Singapore and would like to share the salient points here (some of which I have mentioned before in my blog):

Industrial REITs reported healthy 4Q11 results.

Industrial REITs appeared to outperform market expectations.

Expecting stable performance.

Operating metrics still healthy.

Earnings likely to stay resilient.

Percentage of leases due for renewal at comfortable level.

Aggregate leverage may inch upwards after funding potential investments.

Industrial REITs in better financial position now

Maintain OVERWEIGHT view.

I am pleased to see that AIMS AMP Capital Industrial REIT, Sabana REIT, CIT and Cache Logistics Trust have all performed above consensus expectations as I am vested in all four. Bigger names such as Ascendas and Mapletree have only performed within expectations; not vested. (Refer to exhibit 3 in the report.)

See the full report: here.

Related post:
Office S-REITs VS. Industrial S-REITs (3).

Cache Logistics Trust: 4Q and FY2011 results.

Cache Logistics Trust announced a good set of results.

Its recent acquisitions pushed distributable income upwards by some 9.2% while DPU increased to 2.1c. Annualised, distribution yield is 8.48% with unit price at 99c.

Net gearing: 29.6%.
NAV per unit: 91c.
Interest cover ratio: 8.0x

The CEO, Daniel Cerf, said that although new supply in warehouse space could come on board in late 2012 and 2014, existing demand should take up the new supply as good quality warehouse space is still in short supply in Singapore. (Source: The Straits Times, 19 January 2012).

Last month, I accumulated units of Cache Logistics Trust on weakness at 95c a unit. Those units were divested today at 99c when my overnight sell order was filled. The reason for selling? Technically, I see resistance at 99.5c and, for more than a week, unit price has plateaued at 99c.

In a rangebound situation, I look to the Stochastics for clues and it has been overbought for many sessions. Together with the formation of a doji today on the back of very much higher volume, the risk of a downward movement in price is, therefore, higher. When would a decline happen? When the counter goes XD? Perhaps.

If price should break resistance and move higher, I would still benefit with my remaining investment in the Trust. Otherwise, it would just continue to generate passive income in my portfolio. I think this is a good position to be in.

See presentation slides: here.

Related post:
Cache Logistics Trust: 3Q 2011.

Cache Logistics Trust: 3Q 2011.

A DPU of 2.095c has been declared and this is an 8% increase year on year. Annualised at 8.38c, it would translate to a distribution yield of 8.38% at the last traded price of $1 per unit. Not bad. That would explain the strength of the unit price in the days running up to the announcement.

Occupancy: 100%.
Gearing: 30.4%.
Interest cover ratio: 8.3x.
Total assets: >$830m.
Financing cost reduced from 3.92% to 3.81%.

It would be a natural course for Cache Logistics Trust to eventually have total AUM of $1b. With gearing at 30.4%, it could borrow another $150m easily before hitting the 40% mark as it embarks on acquisitions to hit the $1b AUM mark.

The REIT might not have to do any equity fund raising at all. This would be good for unitholders since all acquisitions in such an instance would be distribution yield accretive, all else remaining equal.

A good set of numbers and I will look out for opportunities to accumulate more units of this REIT on pullbacks.

Technically, when a REIT goes XD, we usually see a pullback in its unit price. We have seen it with AIMS AMP Capital Industrial REIT, Sabana REIT, Cambridge Industrial Trust and First REIT recently.

I have identified the supports for Cache Logistics Trust where it could be more rewarding to enter long positions at. Now, I wait. Wait to receive income for my current investment. Wait for weakness to accumulate more.

See presentation slides: here.

Related post:
Cache Logistics Trust: Initiated long position at 91.5c.

Cache Logistics Trust: Further divestment at $1.

On 29 August, I mentioned that the mini double bottom, if valid, could see price go higher with a target of $1. On that same day, I partially divested my investment in the REIT as gap was filled at 96c.

On 8 September, I divested further at 98c which I thought was a rather stubborn resistance. The stochastics also showed the REIT to be very much overbought.

However, as is my usual style, recognising that TA is all about probability and never certainty, I did not divest fully. Today, my overnight sell order at $1 for Cache Logistics Trust was filled late in the afternoon.

With today's further divestment, my investment in Cache Logistics Trust is reduced to a rather small position, similar in size to my remaining investment in Suntec REIT. I would probably not do a full divestment unless Mr. Market should go crazy and give me a much higher price from here.

Technically, closing at $1.01 on the back of relatively high volume is good news for long holders and we could see the historic high of $1.02 tested next.

With Stochastics still high in the overbought region, we could see the REIT's unit price pulling back to supports. Of course, in extremely bullish circumstances, overbought conditions could persist for quite a while.

Related posts:
Cache Logistics Trust: Gap closed at 96c.
Cache Logistics Trust: Partial divestment at 98c.

Cache Logistics Trust: Partial divestment at 98c.

On 29 August, I blogged about partially divesting my investment in Cache Logistics Trust as the gap was filled at 96c. Today, my overnight sell order at 98c was filled.

After the gap at 97.5c was filled on 1 September, the REIT's unit price seems to be having difficulty clearing 98c, which is a natural candlestick resistance as well.

As the REIT's unit price does not seem to exhibit any form of trend, I look at the Stochastics to catch a glimpse of what is likely to happen next. Stochastics is in the overbought region and this suggests that chances of a pull back is higher than not.

Breaking out of 98c convincingly could see $1 tested next while further downside could see a retest of 91.5c for support. A simple risk and reward consideration suggests that another partial divestment at the current price level is a good idea.

Related post:
Cache Logistics Trust: Gap closed at 96c.

Cache Logistics Trust: Gap closed at 96c.

The unit price of Cache Logistics Trust closed the gap at 96c in the last session.  A white candle with an extremely long upper wick was formed, suggesting strong selling pressure at 96c. 96c is also where we find the flatlined 50dMA which should also act as resistance.

I decided last Friday to put in a sell order over the weekend at 96c for a partial divestment in case gap resistance should be retested today. My sell order at 96c was filled this morning and I made some pocket money.

For people who believe in mini double bottoms, we could see the unit price test $1 if 96c should be taken out convincingly. I would divest more then. Otherwise, we could see unit price retreat to test recent lows once more and that is at 91.5c, my entry price months ago.

I will also be collecting income distribution from the REIT today. So, this is a nice combination of investing for income and capital gains. Regular readers would know that I am not averse to trading my investments in REITs from time to time.

Related posts:
Cache Logistics Trust: Initiated long position at 91.5c.

Cache Logistics Trust: 2Q 2011.

The decision to use funds from the partial divestment of Saizen REIT to invest in Cache Logistics Trust at the right prices a few months ago continues to be rewarding.

The management has declared a DPU of 2.086c for 2Q 2011 which is much higher than the DPU of 1.71c the same quarter last year in 2010. At the high of 99c/unit hit this morning, the REIT had an annualised distribution yield of 8.43%. Income distribution will go XD on 2 August and is payable on 29 August.

Current gearing level is 29.1% and this will increase to 30.2% upon completion of acquisition of a warehouse facility in Loyang belonging to Air Market Express. This acquisition is expected to contribute 0.05c in DPU in time.

I also like how its cost of borrowing has come down with its all in interest cost now at 3.92% compared to 4.37% in the last quarter. This contributes to a higher level of distributable income.

Some other numbers:
NAV/unit: 88c.
Interest cover ratio: 9.2x


Interest cover ratio came down from 9.5x in the last quarter. This suggests that interest expense in dollar terms has gone up faster than net property income (NPI). However, at 9.2x, it is still much healthier compared to AIMS AMP Capital Industrial REIT, Cambridge Industrial Trust or even Sabana REIT. So, I am not unduly worried. Just have to keep an eye on things, as always.

See announcement here.
See presentation slides here.

Related post:
Cache Logistics Trust: 1Q 2011.

Mr. Market is always right.

I blogged about my partial divestment of Saizen REIT as price gap closed at 15c. I still retain more than 10% of my original investment in the REIT. See blog post here.

As Saizen REIT was the largest investment in my portfolio, making up some 40% of total funds invested (excluding funds in my frozen portfolio), the amount of money released was no small change. Leaving the money in the bank was not an option with interest paid on savings a paltry 0.1% per annum.

So, at the right time, I moved bulk of the funds into Cache Logistics Trust, First REIT and Sabana REIT. I blogged about these quite a bit too.

See the following blog posts:
Cache Logistics Trust: Accumulate on weakness.
First REIT: Bought more at 73.5c.
Sabana REIT: Bought more at 93.5c.

Another round of income distribution from all three REITs was received in the last few weeks. The unit prices of all three REITs also went up in the same time.

Today's closing prices are:
Cache Logistics Trust: 97c.
First REIT: 79c.
Sabana REIT: 94c.

What does this suggest? Investing in these REITs has been and still is the right thing to do. Mr. Market is always right.

My largest investment in a REIT now is in AIMS AMP Capital Industrial REIT. The unit price has moved up very nicely as well to 22c. So, the units I accumulated at 19.5c, 20c and 20.5c back in March are in the money too.

Recently, I have taken the opportunity to divest partially and I blogged about my reasons for doing so as well. Read it here.

Generally, I am going to hold on to these REITs for their very attractive distribution yields. I could divest some if they become overvalued (based on fundamental analysis) or overbought (based on technical analysis) or both. No reason to divest until then.

This has been another long day as I try to get used to a new routine. This is likely to continue for weeks to come. Physically and mentally exhausted, I am not in the best condition to trade the market. Being more than 80% in REITs, investing for income, is the best strategy for someone in my position now. Good luck to us all.

Related posts:
REITs lower portfolio risk.
Staying positive on S-REITs.

Mapletree Industrial Trust: A simple analysis.

I looked at the results of Mapletree Industrial Trust (MIT) briefly when it was announced a few days ago. It didn't interest me much and so, I did not blog about it. Someone asked me a couple of days ago what I thought of it and if I would invest in the trust now.

I like industrial properties S-REITs because they probably offer a more stable source of passive income compared to office S-REITs or retail S-REITs. At least, in theory, that's how it is. I also like First REIT which is into healthcare properties. I usually choose to invest in REITs with relatively higher yields compared to their peers in the same sector. After all, investing for income, distribution yield has to be a very important consideration.

MIT's distribution yield, at the last done price of $1.08 per unit and an annualised DPU of 7.72c, is about 7.15%. I cannot say I am excited by the yield. Investing in AIMS AMP Capital Industrial REIT, Cache Logistics Trust or Sabana REIT would give a higher distribution yield.

At $1.08, MIT is also trading above its NAV/unit of 95c (a rich premium of 13.7%). MIT has a gearing level of 36.1% and an interest cover ratio of 6.6x. Occupancy rate is at 93.2%. So, we could possibly see distributable income increasing again in future if occupancy rate improves. This could bump up DPU by a few % but distribution yield would probably not surpass 7.8% even so (ceteris paribus).

Some numbers for easy comparison:

AIMS AMP Capital Industrial REIT (20.5c):
Yield: 9.76%.
NAV/unit: 27c (24% discount).
Gearing: 32%.
Interest cover ratio: 5.7x.

Cache Logistics Trust (95.5c):
Yield: 8.18%
NAV/unit: 88c (8.5% premium).
Gearing: 26.4%
Interest cover ratio: 9.5x.

Sabana REIT (94.5c):
Yield: 9.3%.
NAV/unit: 98c (3.6% discount).
Gearing: 24.9%
Interest cover ratio: 7.9x

For people who were lucky enough to invest in MIT during at its IPO at 93c per unit and are still holding on, they would be enjoying a distribution yield of 8.3% which is more attractive. What about investing in MIT now? The biggest attraction in investing in MIT now is probably its pedigree. Mapletree is, after all, an arm of Temasek Holdings. Ironclad? Probably.

What about Mapletree Logistics Trust (MLT) which has expanded through acquisitions? Back in July 2010, I mentioned that I was wary of this trust because of its high gearing of 43.6%. The management has since brought the gearing level down through equity fund raising. Its numbers are now somewhat stronger:

Mapletree Logistics Trust (90.5c):
Yield: 6.85%.
NAV/unit: 85c (6.5% premium).
Gearing: 39.4%.
Interest cover ratio: 6.7x

MLT's distribution yield is even lower compared to MIT's. Its gearing is also higher. MLT's occupancy rate is >98% and has less room to increase revenue by filling vacancies compared to MIT. If I have to choose between MLT and MIT, the latter has my vote.

See MIT presentation slides here.
See MLT presentation slides here.

Cache Logistics Trust: Reverse head and shoulders.

I am rather excited by the price action of Cache Logistics Trust today. Price formed a wickless white candle as it closed at 96c, the neckline of the potential reverse head and shoulders pattern I mentioned in earlier blog posts. It remains to be seen if this resistance could be overcome. 96c is also where we find the 200dEMA.

If resistance at 96c were taken out, using Fibo lines, I see more significant resistance provided by the golden ratios at 98c (138.2%), 98.5c (150%) and 99c (161.8%). I initiated a long position in this trust at its lowest not long ago and added to my position shortly after. So, if the resistance levels identified should be tested, I would not be averse to some profit taking. Locking in some nice gains? Sure, why not?

Related post:
Cache Logistics Trust: 1Q FY2011 results.

Cache Logistics Trust: 1Q FY2011 results.

Higher DPU than forecast: 1.952c.
XD: 3 May.
Payable: 30 May.

NAV/unit: 88c.
Gearing: 26.4%.
Interest cover ratio: 9.5x

See presentation slides here.

The numbers are nice and strong. Although its distribution yield is lower than AIMS AMP Capital Industrial REIT, I believe that it is a premium that is well worth the money.

Looking at the chart, a potential reverse head and shoulders is quite obvious. Of course, I could be counting the chicks before they hatch here. The neckline is at 96c and if the pattern is a valid one, we could see $1.00 tested again. Good luck to fellow unitholders.