Daiwa House Logistics Trust 1H FY2025 Results: Portfolio Growth, 10% Rent Uplift, and Resilient Financial Performance

Daiwa House Logistics Trust (DHLT): 1H FY2025 Financial Analysis

Daiwa House Logistics Trust (DHLT), an Asia-focused logistics REIT primarily operating in Japan and Southeast Asia, released its results for the first half ended 30 June 2025 (1H FY2025). Below, we provide a structured breakdown of the key financial metrics, performance highlights, and outlook based on information disclosed in the report.

Key Financial Metrics and Performance Overview

Metric	1H FY2025	2H FY2024	1H FY2024	YoY Change	HoH Change
Gross Revenue (S\$’000)	29,174	Not disclosed	27,581	+5.8%	N/A
Net Property Income (NPI, S\$’000)	22,519	Not disclosed	21,233	+6.1%	N/A
Distributable Income to Unitholders (S\$’000)	15,696	Not disclosed	17,104	-8.2%	N/A
Distribution per Unit (DPU, cents)	2.24	Not disclosed	2.45	-8.6%	N/A

While revenue and NPI saw healthy year-on-year growth, distributable income and DPU declined due to higher interest expenses and lower realized gains.

Dividend and Distribution Details

Distribution per Unit (DPU): 2.24 cents for 1H FY2025
Ex-Date: 15 August 2025
Record Date: 18 August 2025
Payment Date: 26 September 2025

The DPU declined 8.6% year-on-year, reflecting higher financing costs and lower distributable income.

Portfolio and Operational Highlights

Portfolio Occupancy: 93.2% as of 30 June 2025
Weighted Average Lease Expiry (WALE): 6.5 years (Japan: 6.0 years; Vietnam: 18.3 years)
Rent Uplift: Weighted average of 10% for leases renewed or signed in 1H FY2025
Lease Expiry Profile: Over 50% of leases expire in 2030 or later, supporting income stability
Acquisitions: DPL Gunma Fujioka acquired in March 2025, adding a green-certified, freehold asset in Greater Tokyo at a 23.4% discount to valuation

Financial Position and Capital Management

Total Assets: S\$1,130.5 million (up from S\$1,083.5 million at end-2024)
Aggregate Leverage: 40.7% (well below the 50% regulatory limit)
Interest Coverage Ratio (ICR): 6.6x (well above 1.5x regulatory minimum)
Debt Profile: 99.3% of borrowings on fixed rates, weighted average debt tenure of 2.3 years, weighted average borrowing cost of 1.69%
NAV per Unit: S\$0.69 (unchanged from end-2024)

Operational Trends and Tenant Base

Japan Portfolio: NPI remained stable with a marginal 0.5% YoY decline (in JPY terms), offset by new acquisitions and higher contributions from select assets amid some vacancies and increased expenses.
Tenant Mix: Top 10 tenants contributed 63.9% of NPI, with Mitsubishi Shokuhin, a 3PL provider, accounting for 23.3%. The portfolio remains heavily focused on 3PL (80.3% of GRI), with additional exposure to retail, e-commerce, and manufacturing.

Macroeconomic and Sector Outlook

Japan

Logistics demand remains robust, supported by e-commerce and reduced supply from 2026 due to rising construction costs.
Over half of surveyed operators plan to expand floor area and sites, with 63% expecting rent increases over the next two years.
Trade and interest rate uncertainties remain, but fundamentals are strong, suggesting ongoing support for the sector.

Vietnam

Sector remains healthy with strong economic growth (GDP up 7.52% in 1H2025) and improving warehouse occupancy rates.
Substantial new supply is expected from 2025 to 2027, and U.S. tariffs on Vietnamese goods have been set at 20%—lower than feared.

Acquisition Track Record

Consistent acquisition strategy focused on high-quality, modern logistics assets at discounts to independent valuations.
Expansion into Vietnam with D Project Tan Duc 2 and continued growth in Japan, including the recent addition of DPL Gunma Fujioka.

Green Initiatives

Numerous properties are green-certified, with a combined solar energy capacity of 18.6 MWp across the portfolio.

Conclusion: Outlook and Assessment

Overall, DHLT’s financial performance in 1H FY2025 remains fundamentally strong, with resilient revenue and NPI growth, supported by high occupancy, long WALE, and a diversified, blue-chip tenant base. The Trust continues to execute an accretive acquisition strategy, further strengthening its income stability and geographic diversification.

However, higher borrowing costs and increased interest expenses have weighed on distributable income and DPU. The aggregate leverage and interest coverage ratios remain comfortably within regulatory thresholds, while the proactive approach to refinancing and high proportion of fixed-rate debt provide additional risk mitigation.

The medium- to long-term outlook remains positive, underpinned by solid sector fundamentals in both Japan and Vietnam, active asset management, and strong sponsor support from Daiwa House Industry. Barring unforeseen external shocks, DHLT appears well-positioned for steady growth and income stability, though investors should monitor interest rate trends and new supply in Vietnam.