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Frasers Logistics & Commercial Trust 2H DPU up 5.5% to 3.65 cents on 'record' revenue

Felicia Tan
Felicia Tan • 3 min read
Frasers Logistics & Commercial Trust 2H DPU up 5.5% to 3.65 cents on 'record' revenue
This brings the REIT’s FY2020 DPU to 7.12 cents, up 1.7% from the 7.00 cents declared in FY2019.
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The manager of Frasers Logistics & Commercial Trust (FLCT) has reported distribution per unit (DPU) of 3.65 cents for the 2HFY2020 ended September, up 5.5% from DPU of 3.46 cents a year ago.

This brings the REIT’s FY2020 DPU to 7.12 cents, up 1.7% from the 7.00 cents declared in FY2019.

Revenue for 2HFY2020 spiked 94.6% y-o-y to $213.3 million, making this a “record” for the REIT. The y-o-y increase was primarily contributed by the merger between Frasers Logistics & Industrial Trust (FLT) and Frasers Commercial Trust (FCOT) in April 2020, the acquisition of German properties from its sponsor in July 2019, as well as other acquisitions made in FY2020 and FY2019.

The higher figures were partially offset by the divestments made in FY2019, the divestment of Heatherton road in Victoria, Australia, as well as $5.7 million in rental waivers and provisions for doubtful debt for qualifying small medium enterprises (SME) tenants due to the Covid-19 pandemic.

2HFY2020 property operating expenses increased 132.5% y-o-y to $44.9 million on higher land and property tax, property management fees and property-related professional fees.

Net property income (NPI) for the half-year period grew 80.6% y-o-y to $161.4 million.

Accordingly, distributable income rose 81.7% y-o-y to $124.9 million and is distributed in full to unitholders.

For the FY2020, revenue climbed 53% y-o-y to $332.0 million while property operating expenses were up 66.6% y-o-y to $62.2 million.

Consequently, NPI for the FY2020 increased 46.2% y-o-y to $258.3 million.

Distributable income for the FY2020 was up 48.8% y-o-y to $201.1 million.

In 2HFY2020, FLCT executed 36 leasing transactions across its logistics and commercial portfolio representing a lettable area of 174,761 sqm. This brings the total leasing activity in FY2020 to 64 transactions for 267,996 sqm or 10.5% of the total portfolio lettable area.

As at Sept 30, FLCT has a portfolio occupancy of 100% and 94.3% for its industrial and commercial portfolio respectively, bringing its overall portfolio occupancy to a “stable” 97.5%.

Weighted average lease expiry (WALE) for the period stood at 5.5 years and 4.2 years for the industrial and commercial portfolio respectively, bringing its total overall WALE to 4.9 years.

Cash and cash equivalents as at Sept 30 stood at $168.7 million.

“Our solid performance, with a full-year DPU of 7.12 Singapore cents delivered amid the Covid-19 pandemic, testifies to the strength and resiliency of the FLCT portfolio,” says Robert Wallace, CEO of the manager.

“Following our merger with Frasers Commercial Trust in April 2020 to form what is today the seventh largest REIT in Singapore, we continue to execute FLCT’s growth strategies in a disciplined manner, acquiring two fully-occupied properties in Melbourne, Australia and Thames Valley, UK in August 2020, and at the same time announcing the divestment of the remaining 50% stake in a specialised cold-storage facility in Queensland, Australia at an attractive premium to book value,” Wallace adds.

Looking ahead, FLCT expects the operating environment to remain “challenging in the months ahead” due to the continued global spread of Covid-19.

Units in FLCT closed 4 cents higher or 3% up at $1.37 on Nov 5.

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