Is Daiwa House Logistics Trust A Good Buy In 2025? [Fundamental Analysis]

Daniel Lee
Jun 14
3 min read

In this article, we'll conduct a fundamental analysis and review of Daiwa House Logistics Trust and its suitability to achieve the following investment objective: To deliver a stable dividend yield of 5% to 6% per year while having high capital preservation ability.

Business Description

Daiwa House Logistics Trust is an industrial REIT that was listed in 2021 and owns industrial properties in Japan and Vietnam.

What I Like About DLHT:

REIT has a very strong sponsor that could provide sufficient financial backing and pipeline supply for future acquisitions.
Tenants are largely focused on e-Commerce and third-party logistics sector in Japan which are resilient with much more room to grow.
The majority of their properties (FY2024: 58.1%) are sitting on freehold land which reduces the impact of lease decay.

What I Do Not Like About DLHT:

Management is not proven given that the counter is only recently listed
Tenants are concentrated with the top 10 tenants accounting for over 66% of the Net Property Income (Figure 12). This may expose the REIT to DPU distribution should any of the top 10 tenants vacate.

Updates From Recent Performance (FY 2024)

General Comments:

DPU from operations decreased by 8.23% mainly due to FX losses with the Yen depreciating by around 8.8% in FY2024. In JPY terms, gross rental income (+1.8%) and Net Property Income (+2.1%) grew slightly.
DHLT expanded outside of Japan in the first time with the acquisition of D Project Tan Duc 2 in Vietnam. DLHT also acquired their 19th property in Fujioka in March 2025.
The portfolio valuation in SGD terms grew by 0.5% as the added value of the acquired properties was offset by the FX depreciation.
The aggregate leverage increased by 3.30% to 38.50% while the cost of borrowing increased by 0.67% to 1.66%.

Positive Headwinds:

The e-Commerce sector in Japan is expected to continue to grow as penetration rate catches up to other developed markets, thereby supporting the resiliency in demand for logistic space.

Negative Headwinds:

Borrowing cost is expected to increase as Bank of Japan has raised their interest rate for the first time in 17 years in March 2024 and have signaled for further rate hikes that is to come moving forward.
Logistic sector in Japan continued to face near term challenges from an increase in supply in general, which is expected to be moderated over the coming years.
Ongoing trade war may place pressure in demand for logistic properties as global trade slows and unoccupancy rate rises. Moving into FY2025, the manager expects some of the space relating to the expiring lease in the first half of 2025 to be vacated.

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