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.

Frasers Logistics and Industrial Trust Declares Lower DPU in Singapore Cents

Frasers Logistics and Industrial Trust announced their 1QFY19 financial results on 24th January 2019. The manager has declared a Distribution Per Unit (“DPU”) of 1.78 cents. This was a 1.1% decline as compared to 1.80 cents in 1QFY18. If we looked at the Distribution Per Unit (“DPU”) in Australian cents, the Distribution Per Unit (“DPU”) was 1.81 cents as compared to 1.70 cents in 1QFY18.

The reason for lower Distribution Per Unit (“DPU”) in Singapore cents was because of a lower average hedged rate for 1QFY2019 at A$1.00 :S$0.9820. 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.

Two leases in Victoria, Australia were renewed during the quarter. The two leases will have annual fixed rental increases of 3.0% and 3.5% respectively which benefit Frasers Logistics and Industrial Trust in the long run.

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.

Debt

Frasers Logistics and Industrial Trust’s aggregate leverage was 35.6%.

1QFY19 Financial Results

1QFY19
(A$’000)
1QFY18
(A$’000)
Change
Gross Revenue 59,524 42,430 40.3%
Net Property Income 48,930 33,391 46.5%
Distributable Income 36,698 25,854 41.9%
Distribution Per Unit (“DPU”) (Australian cents) 1.81 1.70 6.5%
Distribution Per Unit (“DPU”) (Singapore cents) 1.78 1.80 (1.1)%

In 2018, Frasers Logistics and Industrial Trust has been very active in divesting and new acquisitions. You can read more of them here:

Frasers Logistics and Industrial Trust Divests 80 Hartley Street Asset

Frasers Logistics and Industrial Trust Divests Lot 102 Coghlan Road In South Australia

Frasers Logistics and Industrial Trust Acquires NSW Property and QLD Property

Frasers Logistics and Industrial Trust Full Year DPU is 7.19 cents

This is the financial results announcement I have been waiting for. On Monday, 5th November 2018, Frasers Logistics and Industrial Trust has announced their 4QFY18 financial results. You can guess why I am so anxious and excited as Frasers Logistics and Industrial Trust makes up 15% of my stock portfolio and 23% of my wife’s stock portfolio. The manager of Frasers Logistics and Industrial Trust has been rather aggressive in their property divestment and new acquisition and I am expecting some extraordinary results.

You can read more of them here:

Frasers Logistics and Industrial Trust Divests 80 Hartley Street Asset

Frasers Logistics and Industrial Trust Divests Lot 102 Coghlan Road In South Australia

Frasers Logistics and Industrial Trust Acquires NSW Property and QLD Property Read More