Frasers Logistics & Commercial Trust's 1H FY25 Result Review

Basic Profile & Key Statistics

Key Indicators

Performance Highlight

FLCT delivered a stronger YoY performance in revenue and NPI, driven by new contributions from completed developments at Ellesmere Port and Maastricht, as well as the acquisition of 2 Tuas South Link and four German logistics properties. However, NPI growth was partially offset by higher property expenses and currency depreciation (notably AUD). Despite the higher capital distribution from divestment gains, distributable income and DPU declined significantly, largely due to increased finance costs, higher taxes, and a lower portion of management fees paid in units.

Rental Reversion

For 1H FY25, FLCT achieved positive portfolio rent reversion of 2% for incoming vs outgoing basis and 29% for average vs average basis.

Acquisition

In November 2024, FLCT completed the acquisition of 2 Tuas South Link in Singapore. 

Development

The Maastricht Logistics Development in the Netherlands was completed in October 2024, with the lease commencing shortly after. 

Related Parties Shareholding

• REIT Sponsor's Shareholding: Less Favorable
• REIT Manager's Shareholding: Less Favorable
• Directors of REIT Manager's Shareholding: Favorable

Lease Profile

• Occupancy: Moderate
• Highest Annual Lease Expiry in 4 Years: Favorable
• WALE: Moderate
• Weighted Average Land Lease Expiry: Favorable

Debt Profile

• Adjusted Interest Coverage Ratio: Favorable
• Cost of Debt: Favorable
• Gearing Ratio: Moderate
• Fixed Rate Debt Proportion: Moderate
• Unsecured Debt Proportion: Moderate
• Highest Annual Debt Maturity in 4 Years: Moderate
• WADM: Less Favorable

Diversification Profile

• Major Sector Weightage: Favorable
• Top Geographical Weightage: Favorable
• Top Property Weightage: Moderate
• Top 5 Properties' Weightage: Favorable
• Top Tenant Weightage: Moderate
• Top 10 Tenants' Weightage: Favorable

Key Financial Metrics

• Property Yield: Moderate
• Manager's Fees over Operating Distributable Income: Less Favorable
• Operating Distributable Income on Capital: Moderate
• Operating Distributable Income Margin: Moderate
• Operating Distribution Proportion: Less Favorable

DPU Breakdown

• TTM Distribution Breakdown:
• 77% from Operation
• 19.4% from Divestment Proceeds
• 0.2% from Income Support
• 3.3% from Management Fees Paid in Units
• 0.1% from Retention Release

Trends (Up to 10 Years)

• Uptrend: NAV per Unit, Adjusted Interest Coverage Ratio, Top 5 Properties' Weightage
• Slight Uptrend: None
• Flat: None
• Slight Downtrend: None
• Downtrend: DPU from Operations, Committed Occupancy, Top 10 Tenants' Weightage, Property Yield, Operating Distributable Income over Manager's Fees, Operating Distributable Income on Capital, Operating Distributable Income Margin, Operating Distribution Proportion

Price Range & Relative Valuation Metrics

• Dividend Yield: Above +1SD for 1y, 3y & 10y; Above +2SD for 5y
• P/NAV: Below -1SD for 1y, 3y & 5y; Below -2SD for 10y

Author's Opinion

Compared to the previous half-year, gross revenue and NPI have improved slightly, supported by contributions from completed developments and acquisitions. However, distributable income to unitholders and DPU have declined, mainly due to higher finance costs, lower finance income, increased trust and tax expenses, and lower distribution from divestment gains. These were partially offset by a higher portion of management fees being paid in units. On the debt front, around 16% of borrowings are due for refinancing within the next six months.

For more information, check out:

S-REITs Dashboard - Detailed information on individual Singapore REIT

S-REITs Data - Overview and detail of Singapore REITs

S-REIT Comparison - Comparison among Singapore REITs

REIT Review - List of previous REIT review posts

To support my work, check out:

Patreon - Subscribe and get exclusive content

Investing Note - Support by following my Investing Note profile

Facebook Page - Support by liking my Facebook Page    

Facebook Group - REIT Investing Community - Join to share and discuss REITs

Telegram Channel - Singapore REITs Post - Join to receive posts for Singapore REITs

Buy Me a Coffee - Treat me a coffee for my efforts

*Disclaimer: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my findings and should not be considered professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decisions.