SINGAPORE (May 5): The manager of Frasers Logistics & Industrial Trust (FLT) has declared a distribution per unit (DPU) of 1.75 cents for the 1Q ended March, exceeding the forecast DPU of 1.64 cents by 6.7%.
Gross revenue registered at A$40.9 million ($42.45 million) for the quarter, 1.6% above the forecast of A$40.3 million after the inclusion of straight lining rental adjustment.
Actual property operating expenses came in 2.3% below what was forecast due to an exemption for Absentee Landlord Tax Levy by the Victorian State Government for the 2017 tax year, which was partially offset by provisions for repairs and maintenance costs incurred for some properties that had their leases extended and those undergoing leasing negotiations.
As a result, adjusted net property income (NPI) for the quarter was marginally above forecast at A$30.9 million.
Nonetheless, distributable income was A$24.1 million, 5.9% above the forecast A$23.7 million.
This was mainly attributable to lower trust expenses and interest savings from a lower actual weighted average interest rate of 2.8% per annum, compared to a forecast weighted average interest rate of 3.4% per annum.
13,111 sq m of new lease and lease renewals were completed over the quarter, bringing total new leases and renewals executed since FLT’s listing to 113,956 sq m, or 9.3% of the total portfolio GLA.
As at March 31, portfolio occupancy was 99.3% with a WALE of 6.7 years and minimal lease expiries of 0.2% (by gross rental income) for the financial year ending Sept 30.
In its outlook, the manager highlights Sydney as the strongest leasing market with indications of rental growth, some evidence of rental growth in the south-east region, and essentially unchanged industrial rents in Melbourne in the western region. It adds that Brisbane industrial rents remain under pressure.
“The eastern seaboard of Australia continues to show positive demand for industrial properties, driven by economic growth and healthy leasing activity. Interest rates also remain at historically low levels, fuelling investment demand. With a prime portfolio of 54 properties mostly concentrated in New South Wales, Victoria and Queensland, coupled with a solid pipeline of sponsor-developed industrial assets, we remain confident in FLT’s ability to pursue long-term value for our unitholders,” says Robert Wallace, CEO of the manager.
Units of FLT closed 0.5 cent higher at $1.025 on Thursday.
