Frasers Logistics & Industrial Trust - OCBC Investment 2017-06-06: Proposed Portfolio Acquisition Of Seven Properties

Frasers Logistics & Industrial Trust - OCBC Investment 2017-06-06: Proposed Portfolio Acquisition Of Seven Properties FRASERS LOGISTICS & IND TRUST BUOU.SI

Frasers Logistics & Industrial Trust - Proposed Portfolio Acquisition Of Seven Properties

  • Frasers Logistics & Industrial Trust (FLT) announced this morning that it has proposed to acquire a portfolio of seven fully leased or pre-committed industrial properties in Australia from its sponsor Frasers Centrepoint Limited (FCL).
  • This comprises four completed properties and three properties currently under development. The total acquisition amount is ~A$169.3m, which is slightly below their aggregate valuation of A$171.3m. 
  • We are positive on this transaction as the portfolio of properties has an occupancy rate of 100% (including pre-committed leases for the development properties), a WALE of 9.6 years (FLT’s overall WALE will increase by 0.2 years to 6.9 years as a result) and built-in annual rent escalations of 3.1%. Furthermore, six of the properties are on freehold land and the one on leasehold land has 89 years remaining.
  • According to FLT, funding for the proposed acquisitions may be through borrowings or a combination of both debt and equity. We expect management to utilise a capital structure which will be DPU accretive to unitholders. 
  • Pending an analyst conference call with management later, we maintain our BUY rating and S$1.12 fair value estimate on FLT.




Wong Teck Ching Andy CFA OCBC Investment | http://www.ocbcresearch.com/ 2017-06-06
OCBC Investment SGX Stock Analyst Report BUY Maintain BUY 1.120 Same 1.120



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