Frasers Logistics & Commercial Trust - DBS Research 2024-05-08: L&I Portfolio Remains Integral To Earnings

• In 1H24, Frasers Logistics & Commercial Trust (SGX:BUOU)'s revenues witnessed a y-o-y increase, primarily driven by the additional income contribution from Connexion II and Worcester, as well as the recently completed Ellesmere Port. However, there was a slight dip in net property income (NPI) margins during 1H24, mainly due to higher vacancies within the portfolio.

1H24 DPU of 3.48 cents in line with our projections.

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• Additionally, a capital gains distribution of S$13.5mil was made during the quarter, and we understand that it will continue to stabilise DPU.
• It is worth noting that ample capital gains remain from previous divestments, such as Market Street and Cross Street Exchange.

L&I portfolio remains fully occupied, while commercial portfolio saw lower occupancy rates.

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• The decline in commercial portfolio occupancy was primarily attributed to lower occupancy at ATP, where Google returned part of their space in February 2024.
• Looking ahead, the occupancy rate of the commercial portfolio could decline further when Google's remaining lease at ATP is vacated in December 2024. This space is expected to have a total contribution of approximately 4% to revenue.

Strong positive rental reversions of +14.2% in 2Q24.

• Read more at SGinvestors.io.

Dale LAI DBS Group Research | Derek TAN DBS Research | https://www.dbs.com/insightsdirect/ 2024-05-08 SGinvestors.io

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