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
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http://www.ocbcresearch.com/
2017-06-06
OCBC Investment
SGX Stock
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