Frasers Logistics and Industrial Trust Declares DPU of 1.76 cents for 2QFY19

Frasers Logistics and Industrial Trust currently makes up 14% of my stock portfolio and 20% of my wife’s stock portfolio.

On 26th April 2019, Frasers Logistics and Industrial Trust announced their 2QFY19 financial results. The manager has declared a Distribution Per Unit (“DPU”) of 1.76 cents. This was a 2.8% decline as compared to 1.80 cents in 2QFY18. If we looked at the Distribution Per Unit (“DPU”) in Australian cents, the Distribution Per Unit (“DPU”) was 1.82 cents as compared to 1.70 cents in 2QFY18 which was 7.1% higher.

The reason for lower Distribution Per Unit (“DPU”) in Singapore cents was because of the softening of AUD and EUR against the SGD. The exchange rate was A$1.00: S$0.9666 (2QFY18: A$1.00:
S$1.0647). Foreign exchange risk is one key risk when investing in Frasers Logistics and Industrial Trust and I am fully aware of this risk prior to investing.

Occupancy

Frasers Logistics and Industrial Trust’s portfolio remained at near full occupancy of 99.6%, with a weighted average lease expiry (“WALE”) by gross rental income (“GRI”) of 6.71 years. I liked the annual average rent increment baked into its Australia assets.

As of 31 March 2019 Australia Europe Total
Number of properties 60 22 82
WALE 6.43 years 7.08 years 6.61 years
Occupancy Rate 99.4% 100% 99.6%
Annual Average Rent Increment 3.1% CPI-linked/ Fixed N.A

Debt

As of 31st March 2019, Frasers Logistics and Industrial Trust’s aggregate leverage was 35.1%. This was 0.5% down from 35.6% as compared to 1QFY19. The average weighted debt maturity is 2.4 years.

2QFY19 Financial Results

2QFY19
(A$’000)
2QFY18
(A$’000)
Change
Gross Revenue 59,666 43,575 36.9%
Net Property Income 47,866 33,414 43.3%
Distributable Income 36,909 25,866 42.7%
Distribution Per Unit (“DPU”) (Australian cents) 1.82 1.70 7.1%
Distribution Per Unit (“DPU”) (Singapore cents) 1.76 1.81 (2.8)%

Last but not least, it was interesting to know from the presentation slides that E-commerce can be a driver of global logistics market.

  • E-commerce is a key driver behind the development of the global logistics market, which is boosting demand for Logistics and Industrial properties and encouraging new project developments
  • Online retail sales (as percentage of total retail sales) is expected to grow exponentially in the years to come
  • Very strong demand growth has cut the availability of large-scale modern warehouse space, producing capacity constraints in several major logistics hubs globally
  • Growing customer expectations for same-day and same-hour delivery are forcing an increasing number of courier, express and parcel service providers to seek new centres for last mile city distribution.

Screening For Dividend Stocks In May 2019

I have recently added SPH Reit to my wife’s stock portfolio which has been on my watch list for quite some time. It is time to hunt for dividend yielding stocks to add to my watch list so that I can add them to either my or my wife’s stock portfolio when the opportunity arises.

One of the ways to hunt for dividend yielding stocks is to ran a stocks screener. I am currently using Stocks Cafe Stocks Screener as it allows me to save the conditions I have set to screen for dividend yielding stocks.

Here are the results ordered from the highest current dividend yield to the lowest.

Name Current Yield % P/E P/B Market Cap
Manulife Reit USD 8.736 15.7 1.047 1.1B
Haw Par 8.406 17.99 1.101 3.2B
Cromwell Reit EUR 8.367 10.36 0.956 1.1B
OUE Commercial Reit 6.891 10.02 0.701 1.4B
OUE Hospitality Trust 6.772 17.91 0.955 1.3B
Capita Retail China Trust 6.768 10.99 0.949 1.5B
Frasers Commercial Trust 6.531 9 0.938 1.3B
Far East Hospitality Trust 6.061 14.16 0.755 1.2B
Mapletree Industrial Trust 5.818 12.65 1.399 3.9B
CDL Hospitality Trust 5.752 17.58 1.05 1.9B
Oxley 5.688 5.82 0.937 1.3B
Ascendas-iTrust 5.682 6.56 1.471 1.3B
SingTel 5.521 16.68 1.785 51.6B
Suntec Reit 5.429 17.13 0.874 4.9B
DBS 5.409 12.34 1.472 70.6B
Hong Leong Finance 5.376 10.48 0.655 1.2B
SPH REIT 5.337 19.44 1.108 2.7B
Ascendas Reit 5.292 18.56 1.44 9.4B
Frasers Logistics and Industrial Trust AUD 5.116 12.58 1.327 2.5B
Mapletree NAC Trust 5.093 6.87 0.955 4.4B
Frasers Logistics and Industrial Trust 5.092 12.27 1.294 2.4B
SPH 5.081 14.97 1.151 4B
Frasers Centrepoint Trust 5.051 13.21 1.142 2.2B
Fortune Reit HKD 5.037 3.27 0.614 19.7B

Manulife Reit that appears in the top of the list looks interesting. Honestly, I have not done any research or read up on Manulife Reit yet but I do know a few financial bloggers holding the Reit. At 8.736% current dividend yield, this deem attractive to me but of course we all know that the higher the dividend yield, the higher the risk.

I do not know every stocks that appear in the above list but it serves as a good base to start researching deeper into them.

Please take note that the above is not a recommendation to buy or sell.

Happy hunting for dividend stocks!

Frasers Logistics and Industrial Trust Divests 63-79 South Park Drive In Victoria

This is Frasers Logistics and Industrial Trust first divestment in the year 2019. Last year, Frasers Logistics and Industrial Trust had divested Lot 102 Coghlan Road In South Australia and 80 Hartley Street. Frasers Logistics and Industrial Trust has announced that they will divest 63-79 South Park Drive, Dandenong South, Victoria, Australia (the “Property”) at a consideration of A$17.25 million (the “Consideration”).

The Consideration is 13.1% premium to the Property’s book value of A$15.25 million and 4.5% premium to the original purchase price of A$16.5 million at Frasers Logistics and Industrial Trust IPO in 2016.

It is important what the REIT manager uses the proceeds from the divestment. Frasers Logistics and Industrial Trust mention in their press release that the net divestment proceeds may be used for funding potential acquisition opportunities, reducing existing debt and/or other general corporate purposes.

Upon completion of the proposed divestment, Frasers Logistics and Industrial Trust’s portfolio will comprise of 60 properties in Australia, 17 in Germany and five in the Netherlands, with a total value of approximately A$3.0 billion.