Frasers Logistics and Industrial Trust 3QFY19 DPU Is 1.82 Australian Cents

On 26th July 2019, Frasers Logistics and Industrial Trust announced their 3QFY19 financial results. The manager has declared a Distribution Per Unit (“DPU”) of 1.73 Singapore cents. This was a 3.9% decrease as compared to 1.80 Singapore cents in 3QFY18. If we looked at the Distribution Per Unit (“DPU”) in Australian cents, the Distribution Per Unit (“DPU”) was 1.82 cents as compared to 1.76 cents in 3QFY18 which was 3.4% higher.

The DPU is still suffering due to the softening of AUD and EUR against the SGD. The exchange rate was A$1.00: S$0.9504 (3QFY18: A$1.00:S$1.0214).

Occupancy

Frasers Logistics and Industrial Trust’s portfolio remained at near full occupancy of 99.5%, with a weighted average lease expiry (“WALE”) by gross rental income (“GRI”) of 6.27 years. I liked the annual average rent increment baked into its Australia assets.

As of 30 June 2019 Australia Europe Total
Number of properties 59 22 81
WALE 6.00 years 6.93 years 6.27 years
Occupancy Rate 99.4% 100% 99.5%
Annual Average Rent Increment 3.1% CPI-linked/ Fixed N.A

Debt

As of 30th June 2019, Frasers Logistics and Industrial Trust’s aggregate leverage was 35.4%. The average weighted debt maturity is 2.9 years. Weighted average cost of debt is expected to reduce from 2.4% per annum to 2.1% per annum.

3QFY19 Financial Results

The financial results actually looked solid but it is a pity Distribution Per Unit (DPU) in Singapore cents is lower due to softening of AUD and EUR against SGD.

3QFY19
(A$’000)
3QFY18
(A$’000)
Change
Gross Revenue 59,952 49,322 21.6%
Net Property Income 48,882 39,287 24.4%
Distributable Income 36,933 30,666 20.4%
Distribution Per Unit (“DPU”) (Australian cents) 1.82 1.76 3.4%
Distribution Per Unit (“DPU”) (Singapore cents) 1.73 1.80 (3.9)%

Frasers Logistics and Industrial Trust has so far divested the following whereby the capital can be recycled to fund future acquisitions

  • 610 Heatherton Road, Clayton South, Victoria, Australia (13.3% premium to book value)
  • 50% interest in 99 Sandstone Place, Parkinson, Queensland, Australia (8.8% premium to book value)

Recently, Frasers Logistics and Industrial Trust has also propose to acquire 12 prime properties in Germany and Australia (Read more: Frasers Logistics and Industrial Trust Proposed Acquisition of 12 Prime Properties in Germany and Australia)

The acquisition is expected to be DPU and Net Asset Value (NAV) accretive.

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