Frasers Logistics and Commercial Trust reports positive rental reversions for Q3
Benjamin Cher
FRASERS Logistics and Commercial Trust’s (FLCT) portfolio rental reversion in Q3 FY2023 ended Jun 30 stood at 21.4 per cent on an average versus average basis.
About 67,600 square metres were leased and renewed within the quarter, announced the real estate investment trust (Reit) in a filing on Tuesday (Aug 1).
Both logistics and industrial, and commercial portfolios saw increases in rental reversions with the logistics and industrial portfolio reporting a 24.3 per cent increase, driven by properties in Victoria, Australia.
For the commercial portfolio, rental reversions stood at 14.1 per cent, driven by properties in south-east United Kingdom, but offset by properties in Western Australia.
The weighted average lease expiry (Wale) stands at 4.4 years as at Jun 30, with the average Wale of the top 10 tenants at 3.9 years.
The top 10 tenants currently account for 25.2 per cent of gross rental income contribution.
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The occupancy rate for FLCT’s portfolio stands at 96.2 per cent as at Jun 30, with the logistics and industrial portfolio reporting full occupancy.
The commercial portfolio currently has 90.6 per cent occupancy, with only the Caroline Chisholm Centre and 545 Blackburn Road properties in Australia reporting full occupancy.
Maxis Business Park in the UK has the lowest occupancy rate at 80.3 per cent.
All commercial properties have improved their occupancy rate save for Central Park in Australia and Blythe Valley Park in the UK, which have remained at 97.9 per cent and 83 per cent, respectively.
FLCT currently has an aggregate leverage of 28.6 per cent as at Jun 30, with the average weighted debt maturity at 2.2 years.
The Reit says that it has sufficient internal funds and facilities to refinance or repay the debt maturing in FY2023.
“Every potential 50-basis-point increase in interest rates on variable rate borrowings is estimated to impact distribution per unit by 0.07 Singapore cents,” said FLCT.
FLCT expects forex volatility and a stronger Singapore dollar to impact distributable income and net asset value.
The elevated interest rate environment is also expected to persist and may impact distribution per unit.
But the Reit expects rental growth for its logistics and industrial properties due to low vacancies, restricted supply and population growth for the Australian market.
Units of FLCT closed up 1.6 per cent or S$0.02 at S$1.24 on Tuesday.
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