Frasers Logistics & Commercial Trust - UOB Kay Hian 2024-05-08: 1HFY24 Scaling Up In Logistics Properties

• Frasers Logistics & Commercial Trust achieved positive rental reversion of 3.8% (incoming vs outgoing) and 14.2% (average vs average) in 2QFY24. It maintained full occupancy of 100% for its logistics properties across Australia, Europe and the UK.
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Frasers Logistics & Commercial Trust's 1HFY24 results

• Frasers Logistics & Commercial Trust (SGX:BUOU) reported 1HFY24 DPU of 3.48 cents, down 1.1% y-o-y.
• The results exceeded our expectation due to capital distribution of divestment gains of S$13.5m. Management intends to distribute its divestment gains to unitholders in order to keep its DPU stable. It has accumulated substantial gains from the divestment of 55 Market Street and Cross Street Exchange.

Positive growth momentum.

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• rental escalations, and
• contributions from Ellesmere Port, Connexion II and Worcester in the UK.
• NPI margin narrowed by 1.5ppt y-o-y to 73.5% due to:
  1. higher vacancies in commercial properties, and
  2. higher operating expenses, such non-recoverable land taxes in Australia, utilities and repair & maintenance.
• Interest expense increased 28.8% y-o-y due to additional borrowings drawn for capex, developments and acquisitions and higher interest rates.

Commercial properties provided strong positive reversions.

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Jonathan KOH CFA UOB Kay Hian Research | https://research.uobkayhian.com/ 2024-05-08 SGinvestors.io

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