SINGAPORE (Jan 24): The manager of Frasers Logistics & Industrial Trust (FLT), with a portfolio comprising 83 logistics and industrial properties, worth nearly $3 billion, reported DPU of 1.78 cents for the 1Q19 ended Dec, down 1.1% from 1.80 cents a year ago.
The decline came on the back of an enlarged unit base and a lower weighted average hedged currency exchange rate for 1Q19 of A$1:$0.9820 versus A$1:$1.0583 in 1Q18.
In 1Q19, FLT reported revenue of A$59.5 million ($57.9 million), representing an increase of 40.3% from 1Q18, while adjusted net property income rose 46.5% to A$48.9.5 million.
The increases were led by contributions from FLT’s European and Australian acquisitions in FY18 and Dutch acquisition in FY19, as well as surrender fee of A$1.2 million received for parking lots at South Park Drive, Dandenong South, Victoria, Australia, which was partially offset by the divestment of two Aussie properties in August 2018.
Correspondingly, distributable income rose 41.9% to A$36.7 million for 1Q19.
As at Dec 31 2018, FLT’s portfolio remained at near full occupancy of 99.6%, with a weighted average lease expiry (WALE) by gross rental income (GRI) of 6.71 years, and minimal lease expiries by GRI of 2.0% for the financial year ending 30 September 2019.
FLT’s aggregate leverage was 35.6%. Total borrowings were A$1.11 billion, 79% of which were at fixed interest rates.
In its outlook, Frasers Logistics & Industrial Asset Management says industrial take-up levels in Australia are above historical benchmarks largely due to the benefits of an e-commerce boom, higher public infrastructure spending and tenant consolidations.
In addition, land values have appreciated across the three largest industrial markets of Sydney, Melbourne and Brisbane on the back of an increasing scarcity of land.
General conditions for the logistics and industrial market in Germany and the Netherlands remains consistently favourable for investors, . E-commerce continues to drive demand for logistics properties in both Germany and the Netherlands with supply remaining at low levels.
The REIT manager says it will continue to monitor developments on the ongoing global trade tensions and on Brexit. It will also continue to grow FLT’s prime industrial portfolio that could generate sustainable long-term value for unitholders.
Units in FLT closed at $1.08 on Thursday.
