Frasers Logistics & Industrial Trust - OCBC Investment 2019-11-06: Conditions Ripe For Further Inorganic Growth Opportunities

FRASERS LOGISTICS & IND TRUST (SGX:BUOU) | SGinvestors.io FRASERS LOGISTICS & IND TRUST (SGX:BUOU)

Frasers Logistics & Industrial Trust - Conditions Ripe For Further Inorganic Growth Opportunities




FLT's 4QFY19 results met our expectations



100% committed occupancy; minimal lease expiries ahead

  • Operationally, Frasers Logistics & Industrial Trust’s portfolio occupancy was 99.6% (99.4% in Australia and 100% in Europe). Post the quarter-end, management secured a 5- year lease agreement (9,539 sq m) with Amazon for its property at 60 Paltridge Road in Perth. Following this lease, Frasers Logistics & Industrial Trust’s committed occupancy has increased to 100%.
  • Further on the leasing front, Frasers Logistics & Industrial Trust renewed/re-let 122,554 sqm of leases in FY19, or ~5.5% of its portfolio GLA. Tenant retention rate was high at 91.2%, but rental reversions came in at -3.8% as the fixed annual rental step-ups in Frasers Logistics & Industrial Trust’s Australian leases typically outpace market rental growth.
  • In 4QFY19, management completed 49,268 sqm of leasing at five of its properties with an average rental reversion of -4.3%. The leases at the Australian properties carry fixed rental increases of 3-3.5% p.a.
  • Looking ahead, Frasers Logistics & Industrial Trust only has 3.8% and 6.7% of its leases expiring in end-FY20 and end-FY21, respectively, as portfolio WALE remains long at 6.3 years.
  • Frasers Logistics & Industrial Trust saw cap rate compression of 29 bps for its Australia portfolio to 6.13%, while that of Europe declined mildly by 4 bps to 5.24%.


Firm outlook, room for further inorganic growth






OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2019-11-06
SGX Stock Analyst Report HOLD MAINTAIN HOLD 1.28 UP 1.200



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