FLCT sees over 173,000 sq m of leasing in Q3; expects operating conditions to improve

FRASERS Logistics & Commercial Trust (FLCT) recorded 173,087 square metres (sq m) of leasing across its portfolio in Q3 ended June, the real estate investment trust’s (Reit) manager said in a Friday (Aug 5) business update.

Amid this “healthy leasing momentum”, FLCT maintained 100 per cent occupancy for its logistics and industrial (L&I) portfolio, with no expiries in Q4, it added. The commercial portfolio recorded a 91.3 per cent occupancy rate, with 0.9 per cent of income expiring in Q4. Overall occupancy came in at 96.5 per cent.

Aggregate leverage stood at 29.2 per cent as at end-June, down 3.9 percentage points from end-March, with cost of borrowings at 1.6 per cent. It has an average weighted debt maturity of 3 years, with refinancing of S$10 million in Q4.

FLCT acknowledged the challenging operating environment. The weakening of the Australian dollar, euro and British pound against the Singapore dollar has impacted the Reit’s foreign-sourced income. On the interest rate front, every potential 50 basis-point increase in rates on variable rate borrowings is estimated to impact distribution per unit by 0.05 Singapore cent.

Volatile energy costs and inflationary pressures are further expected to place pressure on recovery and growth sentiment, FLCT said. It is also monitoring the impact of the Russia-Ukraine conflict on Europe operations, which have thus far been largely unaffected.

That said, the Reit also added that the “overall operating environment is expected to further improve with strong tenant activity observed, as countries continue to adopt an endemic approach to living with Covid-19 with a progressive return towards normalcy”.

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Looking ahead, FLCT has committed S$118.8 million for the acquisition of a suburban office and 3 L&I assets in Australia. Another S$171.7 million is for a forward-funding L&I acquisition in the UK.

FLCT ended Thursday at S$1.42, up 2.2 per cent or S$0.03.