[SINGAPORE] Frasers Logistics and Commercial Trust (FLCT) on Thursday (Jul 31) reported a lower portfolio occupancy of 92.5 per cent as at Jun 30, down 1.4 percentage points from 93.9 per cent a quarter earlier.
The real estate investment trust also leased around 100,707 square metres in its third quarter ended Jun 30, its manager said in a business update. This brings its total space leased in the year to date to 419,811 sq m.
FLCT’s rental reversion was 43.3 per cent on an average-versus-average basis across its 114 properties in Singapore, Australia, Germany, the Netherlands and the UK.
The trust has a “well-spread lease expiry profile” and is focused on proactive lease renewals ahead of lease expiry and backfilling vacancies, its manager noted. Its average weighted average lease expiry currently stands at six years.
The manager said that FLCT’s top 10 tenants account for 26.2 per cent of its portfolio gross rental income, with no single top 10 tenant contributing more than 5 per cent. It added that five of the top 10 tenants have leases in multiple buildings.
As at Jun 30, FLCT’s portfolio had a book value of S$6.9 billion. Its aggregate leverage stood at 36.8 per cent, with an interest coverage ratio of 4.1 times.
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The manager said S$309 million of undrawn facilities are currently available to meet the debt obligations of S$103 million due in Q4 FY2025.
Looking ahead, the manager identified several “key trends and developments” shaping the trust’s operating environment.
These include “strategic location preferences as companies optimise supply chains in response to tariffs, reshoring and expansion delays”, as well as some third-party logistics providers “adopting cautious real estate strategies with occupiers delaying major investment decisions”.
Post-quarter, FLCT announced the divestment of 357 Collins Street, “a non-core commercial asset” in Melbourne, Australia, for A$192.1 million (S$160.6 million).
The sale, expected to be completed by Sep 30, 2025, will allow the trust to “exit the underperforming Melbourne (central business district) office market”, which the manager said continues to face subdued tenant demand and rising incentives as remote work arrangements persist.
“(The) divestment will also enhance FLCT’s portfolio metrics, while the proceeds from the sale will also provide FLCT with enhanced financial flexibility to pursue opportunities in the logistics and industrial space,” it added.
Units of FLCT closed 1.7 per cent or S$0.015 lower at S$0.88 on Wednesday, before the business update.
