DBS Group Research and CGS-CIMB have maintained their “buy” and “add” calls on Frasers Logistics Commercial Trust (FLCT), with target prices of $1.43 and $1.60 respectively.

DBS analysts Dale Lai and Derek Tan said the target price was raised from the previous target price of $1.40 due to net accretion from the sales and purchase of three properties announced on Aug 4 - two freehold properties in Australia and the UK, coupled with the divestment of the remaining 50% stake in a logistics property in Australia- as well as lower discount rates mainly from lower risk-free and interest rates.

The freehold property in Australia is a logistics property in Melbourne that is fully leased to IVE Group, while the property in UK is the Maxis Business Park just outside of London. These two properties will be acquired at about a 1.2% discount to the agreed property value. They are currently 100% occupied and have a long Weighted Average Lease Expiry (WALE) of 4.9-6.7 years. The total transaction cost of $92.4 million will be fully funded by existing debt facilities or internal resources. 

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