On 1st August 2023, Frasers Logistics and Commercial Trust provided their 3QFY23 Business Updates. Since it is a business updates, the financial results were not available.
As you can see above, Frasers Logistics and Commercial Trust highlighted that their leasing momentum is robust with positive rental reversions. They also achieved a high occupancy rate of 96.2% and a long WALE of 4.4 years. Frasers Logistics and Commercial Trust’s balance sheet remains strong.
Is it true as claimed above? Let us take a more detailed look into Frasers Logistics and Commercial Trust’s 3QFY23 Business Updates below.
Debt
As of 30th June 2023, Frasers Logistics and Commercial Trust’s aggregate leverage stood at a low level of 28.6%.
Frasers Logistics and Commercial Trust has sufficient internal funds and facilities to refinance or repay the debt maturing in FY2023.
75.4% of Frasers Logistics and Commercial Trust’s borrowings are hedged at fixed interest rate. This is because every potential 50 bps increase in interest rates on variable rate borrowings is estimated to impact DPU by 0.07 Singapore cents.
Occupancy
As of 30th June 2023, Frasers Logistics and Commercial Trust’s overall portfolio occupancy stood at 96.2%. From the above, we can see that Logistics and Industrial sector stood strong while Commercial sector is on the weaker end.
Lease expiry is well-spread with no industrial and 17 commercial leases due for renewal in FY2023.
Current Dividend Yield
Let us take a look at Frasers Logistics and Commercial Trust’s share price. Based on its current share price of S$1.19 and FY22 full year distribution of 7.62 cents, this translate to an attractive current dividend yield of 6.40%.
Summary of Frasers Logistics and Commercial Trust 3QFY23 Updates
Based on the above, let me summarize the pros and cons.
Pros
- Aggregate leverage stood at a low level of 28.6%.
- Sufficient internal funds and facilities to refinance or repay the debt maturing in FY2023.
- 75.4% of Frasers Logistics and Commercial Trust’s borrowings are hedged at fixed interest rate.
- Occupancy for Logistics and Industrial sector stood strong.
- Lease expiry is well-spread with no industrial and 17 commercial leases due for renewal in FY2023.
- Attractive current dividend yield of 6.40%
Cons
- Occupancy for Commercial sector is weaker.