Frasers Logistics & Commercial Trust (FLCT) says it sees “healthy leasing momentum” in the 1QFY2023 ended Dec 31, 2022.
During the quarter, the REIT saw some 239,500 sqm in leases and renewals. Rental reversions stood positive at 2.8%.
The REIT’s occupancy rate, however, fell by 0.5 percentage points q-o-q to 95.9% as at Dec 31, 2022. Of the total occupancy rate, the REIT’s logistics and industrial portfolio had a full occupancy rate while its commercial portfolio came in at 89.8%.
For the quarter, FLCT’s weighted average lease expiry (WALE) improved to 4.6 years as at Dec 31, 2022, up from the 4.5 years seen as at Sept 30, 2022.
Aggregate leverage increased by 0.5 percentage points to 27.9% in December 2022 from three months ago while cost of borrowings increased by 0.1 percentage points to 1.7% for the same period.
The percentage of borrowings at fixed rates fell by 3.0 percentage points to 78.7% in December 2022 from three months ago.
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“FLCT has sufficient internal funds and facilities to refinance or repay the debt maturing in FY2023,” says the REIT manager, noting that every potential increase of 50 basis points (bps) in interest rates on variable rate borrowings is estimated to impact FLCT’s distribution per unit (DPU) by 0.06 cents.
“FY2024 borrowings are maturing in June and August 2024. Management has commenced discussion with banks on refinancing options,” the REIT manager adds.
In its outlook statement, the REIT manager noted that foreign exchange (forex) volatility with negative movement in the Australian dollar (AUD), Euro and British pound against the Singapore dollar (SGD) would have an adverse impact on its net asset value (NAV). At the same time, geopolitical tensions, the rising cost of energy and rising interest rates may also impact the REIT negatively.
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That said, the growth of e-commerce, with global retail e-commerce estimated to grow at a four-year compound annual growth rate (CAGR) of 9.3% to US$8.1 trillion ($10.63 trillion) in 2026 will drive demand for quality warehousing.
Units in FLCT closed 4 cents higher or 3.18% up at $1.30 on Feb 1.
