Key Highlights from Frasers Logistics & Commercial Trust’s Q1 2024 Business Updates

January 31, 2024

Logistics stocks

As market focus pivots towards Singapore REITs amidst expectations of peaked interest rates, Frasers Logistics & Commercial Trust (SGX: BUOU), commonly referred to as FLCT, stands out as a leader in the field.

FLCT boasts a diverse portfolio, encompassing 107 logistics and commercial properties across five key developed nations — Australia, Germany, Singapore, the United States, and the Netherlands. This impressive collection is valued at approximately S$6.4 billion, highlighting FLCT’s significant footprint in the global real estate market.

As we unpack FLCT’s Q1 2024 business update, here are some of the key highlights.

1. Leasing and Occupancy Success

FLCT demonstrated robust leasing activity, securing 128,000 sq m of space in Q1, highlighted by a 62,000 sq m lease at Ellesmere Port, UK. This contributed to an impressive portfolio occupancy rate of 95.8%, with all 100 logistics and industrial properties fully occupied and an 89.4% occupancy rate in its eight commercial properties.

2. Strong rental reversion and low gearing level

The company reported positive rental reversions, with an 11.6% increase on an incoming versus outgoing basis and 18.2% on an average basis. The firm also effectively managed its capital, covering over half of the debt maturing in FY2024, maintaining an aggregate leverage of 30.7% and an interest coverage ratio of 6.2 times.

3. Strategic Developments and Expansion

FLCT is actively expanding, notably through the Maastricht Logistics Development in the Netherlands, with construction starting in December 2023 and completion targeted for H1 FY2025. This expansion aligns with the growing demand for logistics facilities.

4. Market Adaptation and Demand Growth

The trust is adapting to changing market demands, capitalizing on the trends of near-shoring and reshoring, as global supply chains prioritize resilience. This strategic focus is set against a backdrop of increasing demand for logistics facilities, driven by the expected rise in global e-commerce.

5. Acknowledging and Addressing Market Challenges

While FLCT has shown strong performance and growth prospects, it remains cautious of potential challenges, including a weak global economic outlook, financial market volatility, and geopolitical tensions, ensuring a balanced approach to its future strategies.

FLCT will benefit from the growth of global e-commerce

These highlights provide a comprehensive overview of FLCT’s recent performance and future prospects as outlined in their business update. While FLCT navigates the waves of global e-commerce growth, potential investors and stakeholders must also weigh in the challenges posed by a volatile global economy, fluctuating financial markets, and geopolitical uncertainties.

Disclaimer: ProsperUs Head of Content & Investment Lead Billy Toh doesn’t own shares of any companies mentioned.

Billy Toh

Billy is deeply committed to making investment accessible and understandable to everyone, a principle that drives his engagement with the capital markets and his long-term investment strategies. He is currently the Head of Content & Investment Lead for Prosperus and a SGX Academy Trainer. His extensive experience spans roles as an economist at RHB Investment Bank, focusing on the Thailand and Philippines markets, and as a financial journalist at The Edge Malaysia. Additionally, his background includes valuable time spent in an asset management firm. Outside of finance, Billy enjoys meaningful conversations over coffee, keeps fit as a fitness enthusiast, and has a keen interest in technology.

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