FRASERS Logistics and Commercial Trust&rsquo s (FLCT) portfolio rental reversion in Q3 FY2023 ended Jun 30 stood at 21.4 per cent on an average versus average basis.

 

About 67,600 square metres were leased and renewed within the quarter, announced the real estate investment trust (Reit) in a filing on Tuesday (Aug 1).

 

Both logistics and industrial, and commercial portfolios saw increases in rental reversions with the logistics and industrial portfolio reporting a 24.3 per cent increase, driven by properties in Victoria, Australia.

For the commercial portfolio, rental reversions stood at 14.1 per cent, driven by properties in south-east United Kingdom, but offset by properties in Western Australia.

 

The weighted average lease expiry (Wale) stands at 4.4 years as at Jun 30, with the average Wale of the top 10 tenants at 3.9 years.

 

The top 10 tenants currently account for 25.2 per cent of gross rental income contribution.

 

The occupancy rate for FLCT&rsquo s portfolio stands at 96.2 per cent as at Jun 30, with the logistics and industrial portfolio reporting full occupancy.

 

The commercial portfolio currently has 90.6 per cent occupancy, with only the Caroline Chisholm Centre and 545 Blackburn Road properties in Australia reporting full occupancy.

 

Maxis Business Park in the UK has the lowest occupancy rate at 80.3 per cent.

 

All commercial properties have improved their occupancy rate save for Central Park in Australia and Blythe Valley Park in the UK, which have remained at 97.9 per cent and 83 per cent, respectively.

 

FLCT currently has an aggregate leverage of 28.6 per cent as at Jun 30, with the average weighted debt maturity at 2.2 years.

 

The Reit says that it has sufficient internal funds and facilities to refinance or repay the debt maturing in FY2023.

 

&ldquo Every potential 50-basis-point increase in interest rates on variable rate borrowings is estimated to impact distribution per unit by 0.07 Singapore cents,&rdquo said FLCT.

 

FLCT expects forex volatility and a stronger Singapore dollar to impact distributable income and net asset value.

 

The elevated interest rate environment is also expected to persist and may impact distribution per unit.

 

But the Reit expects rental growth for its logistics and industrial properties due to low vacancies, restricted supply and population growth for the Australian market.

FRASERS Logistics & Commercial Trust recorded over 239,500 square metres (sq m) of leasing across its portfolio for its first quarter ended Dec 31, 2022, the real estate investment trust&rsquo s (Reit) manager said in a Wednesday (Feb 1) business update.

 

The Reit maintained a 100 per cent occupancy for its logistics and industrial (L& I) portfolio, while its commercial portfolio recorded an 89.8 per cent occupancy rate. Overall occupancy came in at 95.9 per cent.

 

Aggregate leverage stood at 27.9 per cent as at end-December, up 0.5 percentage points from end-September meanwhile, its cost of borrowings stood at 1.7 per cent for the quarter, up 0.1 percentage points from end-September. The Reit has an average weighted debt maturity of 2.7 years, with total gross borrowings at close to S$2 billion as at end-December.

 

Its manager noted that the Reit has sufficient internal funds and facilities to refinance the debt maturing in FY2023. It added that it has commenced discussions with banks on refinancing options pertaining to the FY2024 borrowings, which are maturing in June and August 2024.

 

Amid &ldquo active leasing momentum&rdquo in Q1 FY 2023, FLCT&rsquo s lease expiries had fallen to 4.7 per cent, from 10 per cent as at end-September. The Reit has six industrial and 34 commercial leases due for renewal in FY 2023. Its top 10 tenants had an average weighted average lease expiry (Wale) of 4.3 years, and accounted for only 25.4 per cent of gross rental income (GRI) contribution, representing &ldquo reduced concentration risk&rdquo , its manager said.

 

Looking ahead, FLCT&rsquo s manager noted headwinds such as forex volatility and that the negative movement in Australian dollar, euro and British pound against the Singapore dollar would have &ldquo an adverse impact on net asset value and distributable income&rdquo given FLCT&rsquo s portfolio composition.

 

Geopolitical tensions among nations and political uncertainties will continue to weigh on the global market outlook, as well as the rising cost of energy and rising interest rates, it added.

 

However, the growth of e-commerce could be a bright spot for the Reit. Citing data from market research firm eMarketer, its manager noted that global retail e-commerce will grow at a four-year compound annual growth rate of 9.3 per cent from US$5.7 trillion in 2022 to US$8.1 trillion in 2026, driving demand for quality warehousing.

 

DESPITE no year-on-year change to its distributable income for the second half-year ended Sep 30, Frasers Logistics & Commercial Trust (FLCT) posted a lower distribution per unit (DPU) of 3.77 Singapore cents for the period, a 2.8 per cent fall from 3.88 cents.

 

The real estate investment trust recorded a distributable income of S$139.6 million for H2, largely unchanged from a year ago. The DPU of 3.77 cents brings total DPU for FY2022 to 7.62 cents, 0.8 per cent lower than the 7.68 cents for FY2021.

 

FLCT&rsquo s adjusted net property income fell 10.6 per cent to S$162.1 million from S$181.3 million, while its revenue decreased by 9.7 per cent to S$214.5 million from S$237.6 million.

 

The divestment of Cross Street Exchange, coupled with weaker exchange rates, resulted in lower adjusted net property income and half-year revenue, said the trust&rsquo s manager on Thursday (Nov 10). These were partially offset by contributions from acquisitions made in FY2021 and FY2022.

 

The distribution will be paid out on Dec 15, after books closure on Nov 18.

 

The trust&rsquo s weighted average lease expiry stood at 4.5 years, with a portfolio occupancy rate of 96.4 per cent.