Cache Logistics Trust turns to Down Under as domestic outlook goes south

Australia’s more transparent policies are alluring.

The property firm is looking to strike while the iron is hot, looking to cash in on Australia’s freehold land titles and more transparent policies as opposed to China’s.

According to UOB Kay Hian, Cache’s three Australian acquisitions for A$93.9m during the quarter came on hot on the heels of the acquisition of three Australian properties earlier this year, bringing its Australian portfolio to A$164m.

“Australia now accounts for about 13% of portfolio value,” UOB Kay Hian said.

On the other hand, domestic outlook continues to look bleak for Cache, owing to the lackluster domestic economy, particularly the underperforming manufacturing sector.

“These, and the relatively sombre growth of domestic GDP in 4Q15, underpin the ongoing push overseas,” UOB Kay Hian said.

Meanwhile, average cap rate from Singapore also declined to 6.6% this year from 6.8% last year, while China property saw rate compress to 6.5%.