Daiwa House Logistics Trust posts 12.4% fall in Q1 NPI on weaker foreign currencies

[SINGAPORE] Daiwa House Logistics Trust (DHLT) reported a 12.4 per cent year-on-year decline in its net property income (NPI) for the first quarter ended Mar 31, 2026, falling to S$9.7 million from S$11.1 million in the previous corresponding period.In a business update on Wednesday (May 13), the trust’s manager attributed the decline to the weakening of foreign currencies – specifically the Japanese yen and Vietnamese dong – against the Singapore dollar, alongside lower contributions from the Japan portfolio due to vacancies.The Japan portfolio’s NPI in JPY terms fell by 4.9 per cent due to higher vacancies. However, the group’s Vietnam property, D Project Tan Duc 2, saw its NPI on a cash basis improve by 2.7 per cent in VND terms, driven by built-in rent increases, the trust’s manager said. While the update did not include figures on revenue, the manager noted that portfolio occupancy remained stable at 87.8 per cent as at Mar 31, 2026. Out of the 19 properties in the group’s portfolio, 16 were at full occupancy.“Of the three leases expiring in the second quarter of FY2026, one lease has been renewed, with another expected to be renewed, both at higher rent, while discussions with a potential tenant are ongoing for the space to be vacated,” the manager added. The Reit maintained a healthy capital management profile with an aggregate leverage of 40.6 per cent and an interest coverage ratio of 5.1 times. Navigate Asia ina new global orderGet the insights delivered to your inbox.Looking ahead, the manager observed that the “demand and supply dynamics of logistics space in Japan are rebalancing”.“Demand for logistics facilities in Japan is expected to remain firm, supported by the continued growth of e-commerce and third-party logistics sectors,” it said. “Following years of substantial supply to the logistics sector in Japan, new supply is expected to moderate going forward as rising construction costs impact future facility developments,” the manager added.SEE ALSOJapan to tighten rules for shareholder proposals amid pushback against activismThe group expects the long-term prospects of Vietnam’s logistics sector to be healthy, supported by a resilient economy, e-commerce expansion, and government support. Jun Yamamura, CEO of the manager, said: “The Middle East conflict has added further uncertainties to global economies. While no immediate direct impact on DHLT’s portfolio was observed, we remain cognisant that it may weigh on the wider economy of the markets that DHLT operates in, the interest rate environment, as well as foreign exchanges.”Units of DHLT closed flat at S$0.49 on Wednesday, before the release of the business update.Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.