This REIT delivered results that are inline. I favor Cache more than Aims AMP and Sabana due to its higher yield yet lower gearing. (Compare against other REITs here)
Assets: 788 mil
Cash: 7.6 mil
Debts: 203 mil
Qtr Net Income: 10.6 mil
Qtr Net Operating Cash flow: 19.4 mil
Qtr Capex on existing properties: 5 mil
Qtr Free Cash Flow: 14.4 mil
Qtr Interest Expense paid: 1.5 mil
Qtr Distribution to share holders: 12 mil
EV/EBITDA: 18 times
PTB: 1 time
I am very comfortable with paying 95 cents ( current share price ). Cache is probably the REIT that is at fair value.
- A lot of REITs do not have much capital expenditure done on their properties. Seems like it is more asset acquisition rather than asset enhancements.
- Valuation is fair. For this price I pay for an annualized 8.2% yield or 48 mil in cash flow.
- Distribution is less than net property income
- Interest paid is very low. I was looking at Fortune REIT and they have a huge chunk of their net property income shaved by interest expense. Perhaps this 1.5 mil is just a small part of a bigger interest expense. It will be good if they can keep interest expense less than 10% of operating cash flow
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