Frasers Logistics & Commercial Trust Analysis @ 16 November 2020

Basic Profile & Key Statistics

Frasers Logistics & Commercial Trust (FLCT) is a diversified REIT which invests in office, industrial and logistic sector. FLCT owns 100 properties across Australia, Singapore, Germany, England and Netherlands.

Performance Review

As FLCT merger with FCOT is only completed in April this year, comparing performance YoY is less meaningful, besides DPU, which increased by 5.5% YoY. 

FY20 rental reversion is at -0.1%, where 2H Rentl reversion is -4.4% for industrial lease and +8.3% for commercial lease.

Lease Profile

Occupancy is high at 97.5%. WALE is long at 4.9 years where the highest lease expiry of 16.6% falls in FY23. Weighted average land lease expiry is long at 89.56 years, this figure is estimated from the latest presentation, by valuation.

Debt Profile

Gearing ratio is moderate at 37.4%. Cost of debt is low at 1.9% with moderate level of unsecured debt at 79%. Fixed rate debt is low at 54.6%. Interest cover ratio is high at 6.4 times. WADE is moderate at 3 years where the highest debt maturity of 26.4% falls in FY25.

Diversification Profile

Top geographical, top property, top tenant and top 10 tenants contributions are low at 20.8%, 10.5%, 4.7% and 23.8% respectively. Note that top geographical and top property contributions are based on valuation, figures will be updated upon release also annual report. The top 3 countries' weightage (in terms of valuation) are from Australia at 47.4%, Singapore at 20.8% and Germany at 21%. 

Key Financial Metrics

Property yield is slightly high at 5.6%. Management fee is moderate in which unitholders receive S$ 7.04 for every dollar paid. Distribution on capital and distribution margin are high at 4.4% and 60.7% respectively.

Trends

Uptrend - NAV per Unit

Flat - DPU, Distribution Margin

Downtrend - Interest Cover Ratio, Property Yield

 

Relative Valuation

i) Average Dividend Yield  - Average yield at 6.50%,  apply the past 4 quarters DPU of 7.12 cents will get S$ 1.10. 

ii) Average Price/NAV - Average value at 1.15, apply the latest NAV of S$ 1.105 will get S$ 1.27.

Author's Opinion

Favorable	Less Favorable
Diversified Sector	Interest Cover Ratio Downtrend
High Occupancy	Property Yield Downtrend
Long WALE
Well Spread Lease Expiry
Long Weighted Average Land Lease Expiry
Low Cost of Debt
High Interest Cover Ratio
Well Spread Debt Maturity
Low Top Geographical Contribution
Low Top Property Contribution
Low Top Tenant & Top 10 Tenants Contribution
High Distribution on Capital
High Distribution Margin
NAV per Unit Uptrend

FLCT fundamentals and performance are solid as usual. In August, FLCT has completed the acquisition of 2 properties and announced to divest 50% interest in the Cold Storage Facility, which is expected to complete by December. These capital recycling should further improve FLCT performance and balance sheet. FLCT is currently on the STI reserve list, with its market cap and price movement, it has a high potential to be included in STI in the near term.

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*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions as well as loss, or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.