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Frasers Logistics & Commercial Trust - OCBC Investment 2022-08-08: Resilient Operations But FX To Weigh

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

Frasers Logistics & Commercial Trust - Resilient Operations But FX To Weigh

  • Frasers Logistics & Commercial Trust (FLCT)'s 3QFY22 portfolio rental reversions of +9.9% (average to average).
  • No distribution (DPU) declared but weakening AUD, EUR and GBP against S$ to impact foreign-sourced income.
  • Aggregate leverage declined to 29.2%; capital redeployment remains key.



FLCT's 3QFY22 business updates exhibited continued resilient operating metrics

  • Frasers Logistics & Commercial Trust (SGX:BUOU) provided a business update for 3QFY22 (1 Apr 2022 to 30 Jun 2022).
  • Portfolio occupancy increased 0.4ppt q-o-q to 96.5%. Its logistics and industrial (L&I) portfolio remained fully occupied, while occupancy for its commercial properties improved from 90.5% (as at 31 Mar 2022) to 91.3%. This was in turn driven by higher occupancy at Alexandra Technopark (+0.7 ppt q-o-q to 93.2%) and Farnborough Business Park (+3.6 ppt q-o-q to 82.0%).
  • None of its other commercial properties recorded a decline in occupancy rates.


Overall positive rental reversions of 9.9% (based on average lease rental rates)

  • Based on average gross rental of new/renewed leases to average gross rental of expiring leases, Frasers Logistics & Commercial Trust’s overall portfolio rental reversions were robust +9.9% in 3QFY22 (2QFY22: +2.6%), and this can be broken down into +10.1% for its L&I portfolio, and +8.5% for its commercial assets.
  • If we look at rental reversions from an incoming signing gross rent to expiring gross rent basis, this would be flat for the portfolio given the effects of annual rental step-ups over the course of the lease tenure.
  • Rental reversions were boosted by one of its Netherlands assets, whereby rental terms are linked to the consumer price index (CPI). This helped to drive rental reversions of 17.7% (average to average) and 5.0% (incoming rent versus outgoing rent) for the property.

Aggregate leverage dipped to 29.2%; weakening foreign currencies to weigh on 2HFY22 DPU






OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2022-08-08
SGX Stock Analyst Report BUY MAINTAIN BUY 1.57 DOWN 1.610



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