SINGAPORE (June 29): To date, the best performing REIT since the market made its low on March 23 this year is Frasers Logistics and Commercial Trust (FLCT), which was formerly known as Frasers Logistics and Industrial Trust. The renaming followed its merger with Frasers Commercial Trust on April 24, when it issued 1,130.2 million new FLT units, taking the total number of FLCT units outstanding to 3,392 million units. In 1Q2020, the Australian dollar fell sharply against the Singapore dollar, from 93 cents in Feb to 81 cents on March 21, before rebounding. The Australian dollar is now valued at 96 cents. FLCT’s price performance tracked the Australian dollar closely, making a low of 87 cents on March 23 before rebounding. The REIT may continue to rise in the near term and much depends on the direction of the Australian dollar.
In a REIT sector update dated Jun 17, Lim & Tan says, “We think that FLCT is now fairly valued and have a ‘hold’ recommendation. We recommend investors to slowly trim should the rally continue and accumulate when it pulls back to below -1 standard deviation.”
The second-best performer since March 23 is IREIT Global which fell to a low of 42 cents on March 23. On April 7, City Developments and Tikehau Capital, which own IREIT Global’s manager, jointly announced they had acquired 12% and 16.64% in IREIT Global respectively, taking their respective stakes to 20.87% and 29.2%. The price at which the stakes were acquired was not revealed, but in an April up-date, RHB Securities estimated it at 49 cents.
In a 1Q2020 update on May 13, IREIT Global’s manager said a handful of its Spanish tenants have requested for rebates, and this accounted for less 2% of its rental income. In Germany, four retail units had to close because of the lockdown, which is being lifted across Europe in phases as the number of Covid-19 cases recedes.
