For context, energy prices have increased by 10 times since the Russia-Ukraine war started and are 50% higher compared with neighbouring France, where Germany imports 55% of its natural gas from Russia through the North Stream pipeline. The Bundeskbank warned that an immediate ban on Russian gas imports would reduce GDP growth by 5 percentage points, dragging Germany into a deep recession.
UOB Kay Hian Group Research analyst Jonathan Koh has kept a “buy” rating on Frasers Logistics and Commercial Trust (FLCT) with a lowered target price of $1.60 from $1.65.
Koh’s report comes amid a slowdown in Germany’s economy due to supply chain disruptions, surging energy prices and the slowdown of its second largest export market, China. In particular, the auto manufacturing industry suffered the hardest hit. In his report, the analyst said that the German economy could be the REIT’s “Achilles’ heel” even if its logistics portfolio remains resilient.
