Covid-19 had 'no material impact' on Frasers Logistics & Commercial Trust's portfolio despite challenges to retail segment

THE Covid-19 pandemic has dented Frasers Logistics & Commercial Trust's distributable income (FLCT) BUOU : BUOU 0% by about S$0.2 million for Q1 2022, but this has not been material to the real estate investment trust (Reit), said its manager in a business update on Monday (Feb 7).

The figure comprises mainly rental waivers and allowance for doubtful receivables attributable to the pandemic.

There has also been "no material impact" to FLCT's porfolio to date, with only the retail segment of its commercial portfolio being "more challenged". This segment represents about 1.7 per cent of FLCT's overall income.

"Structural changes driven by the growth of e-commerce activities and 'hub-and-spoke' trend are expected to drive demand for logistics and suburban office spaces, respectively," FLCT's manager said.

FLCT logged 69,274 sq m of leasing for Q1 2022, and overall portfolio reversion was down 1.6 per cent on an incoming versus outgoing basis.

Occupancy rate stood at 100 per cent for the logistics and industrial portfolio and 91 per cent for the commercial portfolio. The weighted average lease expiry was 4.6 years for its top 10 portfolio tenants who are based in Australia, Germany and Singapore.

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The manager said FLCT had a well-spread out lease expiry profile, with no more than 17.4 per cent of gross rental income (GRI) expiring in any single year, translating to reduced concentration risk. 54.7 per cent of its GRI contribution comes from logistics and industrial tenants.

Six industrial and 38 commercial leases are up for renewal for the rest of FY2022, translating to GRI of 4.8 per cent.

In January, FLCT announced the divestment of Cross Street Exchange in Singapore for S$810.8 million. This is expected to raise occupancy rate and lower its aggregate leverage, the manager said.

For Q1 2022, FLCT aggregate leverage stood at 34.3 per cent, average weighted debt maturity stood at 3.1 years while debt headroom was down S$139 million to S$2.32 billion. Total gross borrowings stood at S$2.56 billion.

Units of FLCT ended down 0.71 per cent or S$0.01 at S$1.39 on Monday.