FLT posts better-than-expected DPU in third quarter

A property in Australia from Frasers Logistics & Industrial Trust's portfolio. It said demand for its facilities has been strong.
A property in Australia from Frasers Logistics & Industrial Trust's portfolio. It said demand for its facilities has been strong.PHOTO: FRASERS LOGISTICS

Manager also expects to meet projected DPU of 6.5 cents for full year to Sept 30

Frasers Logistics & Industrial Trust (FLT) recorded distributable income above its initial public offering forecast for the fourth straight quarter, the manager said yesterday.

Third-quarter distribution per unit was 1.75 Singapore cents for the real estate investment trust, which deals in Australian industrial property.

Net property income was A$30.8 million (S$33.4 million) for the three months to June 30 while revenue came in at A$40.2 million.

Last Wednesday, unit holders approved a portfolio acquisition of seven properties for A$169.3 million - a move that Mr Robert Wallace, the manager's chief executive, said "will further strengthen FLT's portfolio metrics and contribute to distributable income".

The transaction will be funded by proceeds from the private placement of 78 million new units at an issue price of S$1.01 per unit on July 6, as well as through debt financing.

FLT also renewed two leases - one at South Australia's Adelaide Airport and the other in Queensland - during the quarter, with portfolio occupancy stable at 99.3 per cent.


    NET PROPERTY INCOME: A$30.8 million

    REVENUE: A$40.2 million

    DISTRIBUTION PER UNIT: 1.75 Singapore cents

"The Australian industrial supply is marginally above the long-term average, with construction activity predominantly concentrated in Melbourne and Sydney," the manager said.

"Occupier demand has been strong for both existing and speculative facilities, which has resulted in rental growth and improvement in vacancy" in both cities.

Meanwhile, "Brisbane is experiencing improving demand for new stock while existing vacancy continues to remain at elevated levels", it said.

The manager noted that Australian investment sales volumes remain tight because of a low level of stock coming to market.

This has prompted corporate sale and leaseback activity, which, in turn, squeezes prime yields.

Still, the manager said that it expects FLT to at least meet its projected distribution per unit of 6.5 Singapore cents for the full year to September 30, barring unforeseen circumstances.

FLT joined the Singapore Exchange on June 20 last year, in an initial public offering that raised around S$903 million.

Its units closed up 1.5 Singapore cents, or 1.4 per cent, at $1.11 yesterday, before the announcement.

Correction note: FLT raised around S$903 million in an initial public offering when they joined the Singapore Exchange last year, not A$51.1 million. We are sorry for the mistake.

A version of this article appeared in the print edition of The Straits Times on July 29, 2017, with the headline 'FLT posts better-than-expected DPU in third quarter'. Print Edition | Subscribe