Alexandra Technopark’s occupancy grew 7.4 percentage points to 85.9%, as tenants were secured for about 25% and 13% of the first and second tranche respectively of Google’s space. To recap, Google’s first and second tranche of space — which are expired or expiring in February and December — covers 150,000 and 218,000 square feet, respectively, a total of about 4% of the trust’s gross rental income.
FLCT’s logistics and industrial (L&I) portfolio registered solid rental reversion of 40.7%, although occupancy fell by 0.6 percentage points to 99.4%.
Lee notes that FLCT has underperformed S-REITs ytd, which the analyst attributes to three key investors concerns. These are slowing logistics rental growth globally which 3QFY2024 should debunk given stronger L&I reversions, vacancy risks within Alexandra Technopark and the UK, some of which should be allayed in 3QFY2024 and lack of guidance on payout of divestment gains.
Moving forward, Citi sees slight positive share price impact given the partial back-filling of Google’s space as well as strong L&I rental reversions.
As at 9.52am, units in FLCT are trading 1 cent higher or 1% up at $1.
