FRASERS Logistics and Commercial Trust : BUOU 0% (FLCT) posted a 1.1 per cent fall in distribution per unit (DPU) to S$0.0348 for its first half ended Mar 31, from S$0.0352 in the corresponding year-ago period. 

It will be paid out on Jun 18, and represents an annualised distribution yield of 6.9 per cent based on FLCT’s annualised DPU and closing price as at Monday (May 6).

Revenue rose 3.9 per cent to S$216 million for the half year, from S$208 million previously.

The real estate investment trust (Reit) posted a 0.6 per cent increase in H1 net property income (NPI) to S$158.8 million, from S$157.9 million the year before. 

Excluding straight lining adjustments for rental income and adding lease payments of right-of-use assets, adjusted NPI stood at S$158.7 million for the period, up 1.8 per cent from S$155.9 million the previous year. 

On Tuesday, the Reit manager said the increases in both revenue and NPI came on the back of positive rent reversions and rental escalations, as well as contributions from its UK properties such as Ellesmere Port, Connexion II and Worcester.

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This was, however, offset in part by higher vacancies in FLCT’s commercial assets and higher property operating expenses, mainly due to increased non-recoverable land taxes in Australia, alongside utilities, repair and maintenance expenses.

Finance costs for the period were higher as well, due to increased interest rates and additional borrowings drawn for capital expenditure, fund-through developments and acquisitions. 

As a result, distributable income for the first half fell 0.1 per cent to S$130.7 million, from S$130.8 million previously. 

Capital distribution included rental support that the Reit received from vendors in relation to the acquisition of certain properties in the UK. 

FLCT’s portfolio occupancy rate stood at 94.3 per cent as at Mar 31, with a weighted average lease expiry of 4.3 years.

The Reit’s net asset value per unit stood at S$1.16 as at Mar 31. 

During the half-year period, FLCT completed its acquisition of 89.9 per cent interest in four logistics assets in Germany. 

The manager said the acquisition increased the proportion of FLCT’s logistics and industrial portfolio to 70.9 per cent as at Mar 31, from 70.3 per cent as at Dec 31, 2023. 

FLCT also completed the development of Ellesmere Port, a freehold logistics and industrial development in the UK. This brought its total portfolio size to 112 properties valued at S$6.8 billion as at Mar 31, excluding one property under development in Europe and right-of-use assets. 

The manager noted that FLCT maintained a “healthy capital position” with aggregate leverage at 32.7 per cent for H1, although finance costs remained elevated due to higher interest costs on borrowing. It said it will maintain its focus on seeking opportunities for investing in logistics and industrial assets to improve portfolio resilience.

The manager added that it will maintain a prudent capital management approach and employ appropriate hedging strategies to mitigate foreign exchange and interest rate risks.

Units of FLCT closed flat at S$1.01 on Tuesday.