FLCT posts over 239,500 sq m of leasing in Q1; overall occupancy rate at 95.9%
Paige Lim
FRASERS Logistics & Commercial Trust recorded over 239,500 square metres (sq m) of leasing across its portfolio for its first quarter ended Dec 31, 2022, the real estate investment trust’s (Reit) manager said in a Wednesday (Feb 1) business update.
The Reit maintained a 100 per cent occupancy for its logistics and industrial (L&I) portfolio, while its commercial portfolio recorded an 89.8 per cent occupancy rate. Overall occupancy came in at 95.9 per cent.
Aggregate leverage stood at 27.9 per cent as at end-December, up 0.5 percentage points from end-September; meanwhile, its cost of borrowings stood at 1.7 per cent for the quarter, up 0.1 percentage points from end-September. The Reit has an average weighted debt maturity of 2.7 years, with total gross borrowings at close to S$2 billion as at end-December.
Its manager noted that the Reit has sufficient internal funds and facilities to refinance the debt maturing in FY2023. It added that it has commenced discussions with banks on refinancing options pertaining to the FY2024 borrowings, which are maturing in June and August 2024.
Amid “active leasing momentum” in Q1 FY 2023, FLCT’s lease expiries had fallen to 4.7 per cent, from 10 per cent as at end-September. The Reit has six industrial and 34 commercial leases due for renewal in FY 2023. Its top 10 tenants had an average weighted average lease expiry (Wale) of 4.3 years, and accounted for only 25.4 per cent of gross rental income (GRI) contribution, representing “reduced concentration risk”, its manager said.
Looking ahead, FLCT’s manager noted headwinds such as forex volatility and that the negative movement in Australian dollar, euro and British pound against the Singapore dollar would have “an adverse impact on net asset value and distributable income” given FLCT’s portfolio composition.
Geopolitical tensions among nations and political uncertainties will continue to weigh on the global market outlook, as well as the rising cost of energy and rising interest rates, it added.
However, the growth of e-commerce could be a bright spot for the Reit. Citing data from market research firm eMarketer, its manager noted that global retail e-commerce will grow at a four-year compound annual growth rate of 9.3 per cent from US$5.7 trillion in 2022 to US$8.1 trillion in 2026, driving demand for quality warehousing.
Units of FLCT closed at S$1.30, up S$0.04 or 3.2 per cent on Wednesday before the results release.
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