FLCT 1QFY22 Business Update

Frasers Logistics and Commercial Trust 1QFY22 Updates

FLCT 1QFY22 Business Update

Frasers Logistics and Commercial Trust (FLCT) has provided their key business and operational updates for 1QFY22 on 7th January 2022. Currently, FLCT makes up 11.74% of my stock portfolio.

Portfolio_202201_January

The business updates focuses on occupancy, acquisitions and divestments.

Acquisitions and Developments

On 30th November 2021,  FLCT has announced forward funding acquisition of a prime warehouse development in the UK, with a committed lease term of 15 years for a total consideration on a completed basis of £28.3 million. The acquisition is expected to complete expected in 1QFY23.

The manager has also commence the development of ‘Connexion II’ at Blythe Valley Park in the UK: £23.3 million ~10,800 sqm L&I development comprising three standalone units. The development is expected to complete in 4QFY22.

Divestments

On 2nd December 2021, Frasers Logistics and Commercial Trust announced the divestment of a leasehold property in Port Melbourne for A$42.5 million.

On 25th January 2022, the manager announced another divestment of Cross Street Exchange in Singapore for S$810.8 million.

Cross Street Exchange

Occupancy

Occupancy for Logistics and Industrial portfolio stood at 100%.

FLCT Logistics and Industrial Portfolio Occupancy 1QFY22

The occupancy for the commercial portfolio stood at 91.0%.

As you can see below, 2 commercial properties in Singapore are underperforming.

As mentioned above, Frasers Logistics and Commercial Trust is divesting Cross Street Exchange at S$810.8 million which is one of the underperforming property. This will lower Frasers Logistics and Commercial Trust’s gearing to 29.8%.

FLCT Commercial Portfolio Occupancy 1QFY22

Debt

Gearing ratio stood at 34.3%. In my opinion, the aggregate leverage remains healthy with room for further debt for future acquisitions.

The Weighted Average Debt Maturity stood at 3.1 years whereby 71.6% of debt are hedged at fixed rate.

S&P has issued Frasers Logistics and Commercial Trust a credit rating of BBB+ / Stable.

FLCT Debt Maturity Profile 1QFY22

Current Dividend Yield

Based on the current share price of S$1.41 and FY2021 full year dividend payout of 7.58 cents, this translate to a current dividend yield of 5.45%.

FLCT Share Price 11 Feb 2022

Summary of Frasers Logistics and Commercial Trust 1QFY22 Update

Here is an overall summary of the operational updates.

  • Healthy overall portfolio occupancy at 94%.
  • Occupancy of commercial portfolio remains weak but we can see the manager is doing something which is divestment of non performing properties at attractive valuations.
  • Attractive current dividend yield at 5.45%.
  • Low aggregate leverage of 29.8% after divestment of Cross Street Exchange.

As an existing investor of Frasers Logistics and Commercial Trust, acquisitions and divestments are normal and part of the managers strategy.

As such, we should be expecting more announcements of future acquisitions and divestments given that there is more room for more debt.

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