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REITs investment & personal finance

Sunday, May 09, 2021

Frasers Logistics & Commercial Trust Review @ 9 May 2021

Basic Profile & Key Statistics

Frasers Logistics & Commercial Trust (FLCT) is a diversified REIT that invests in the office, industrial, and logistic sectors. FLCT currently owns 97 properties across Australia, Singapore, Germany, England and Netherlands.

Performance Highlight

Gross revenue, NPI and distributable income increased by more than 70% YoY mainly due to the merger with Frasers Commercial Trust in Apr 2020 and strengthening of AUD:SGD and EUR:SGD. DPU on the other hand, increased by 9.5% YoY. 
Rental reversion is at +0.1% for 2Q FY21, mainly come from commercial properties. 

Related Parties Shareholding

  • REIT sponsor's shareholding is low at 22.6%
  • REIT manager's shareholding is low at 0.56%
  • Directors of REIT manager's shareholding is high at 3.54%

Lease Profile

  • Occupancy is slightly high at 96.8%
  • WALE is long at 4.7 years
  • Highest lease expiry within 5 years is low at 17% which falls in FY2023
  • Weighted average land lease expiry is long at 89.27years 

Debt Profile

  • Gearing ratio is slightly low at 35.3%
  • Cost of debt is low at 1.9%
  • Fixed rate debt % is moderate at 70.6%
  • Unsecured debt % is high at 81.9%
  • WADM is slightly long at 3.1 years
  • Highest debt maturity within 5 years is slightly low at 28.2% which falls in FY2025
  • Interest coverage ratio is high at 6.8 times

Diversification Profile

  • Top geographical contribution is low at 22.9%
  • Top property contribution is low at 7.7%
  • Top 5 properties contribution is low at 22.1%
  • Top tenant contribution is low at 4.9% 
  • Top 10 tenants contribution is low at 24% 
  • Top 3 countries contribution is from Australia, Germany and Singapore which contribute more than 90% of GRI

Key Financial Metrics

  • Property yield is slightly high at 5.5% 
  • Management fees over distribution is slightly high at 14.7% in which unitholders receive S$ 6.80 for every dollar paid 
  • Distribution on capital is high at 4.1%
  • Distribution margin is high at 57.4%

Trends

  • Uptrend - NAV per Unit
  • Slight Uptrend - DPU
  • Slight Downtrend - Distribution Margin
  • Downtrend -Interest Coverage Ratio, Property Yield, Distribution on Capital

Relative Valuation

  • Dividend Yield - Latest 4 quarters DPU @ 7.45 cents / average yield @ 6.35% = S$ 1.17. 
  • Price/NAV - NAV @ S$ 1.14 x average P/NAV @ 1.16 = S$ 1.32


Author's Opinion

 Favorable Less Favorable
Diversified SectorLow REIT Sponsor's Shareholding
High Directors of REIT Manager's ShareholdingLow REIT Manager's Shareholding
Long WALEInterest Coverage Ratio Downtrend
Well Spread Lease ExpiryProperty Yield Downtrend
Long Weighted Average Land Lease ExpiryDistribution on Capital Downtrend
Low Cost of Debt 
High Unsecured Debt % 
High Interest Coverage Ratio 
Low Top Geographical Contribution 
Low Top Property & Top 5 Properties Contributions 
Low Top Tenant & Top 10 Tenants Contributions 
High Distribution on Capital 
High Distribution Margin 
NAV per Unit Uptrend

On 13 Apr 2021, FLCT has finally being included in STI, albeit there is no price hike since then. For this 1H, FLCT performance has improved as compared to the previous half-year despite the divestment of Sandstone Place and SA Portfolio. Its fundamentals remain solid as well as seen from the above table. 


For more information, you could refer to:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

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*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions and loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.

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