Frasers Logistics and Commercial Trust (FLCT) has announced its 1QFY2025 ended December 2024 business update. The trust reported an active leasing momentum with overall positive rent reversions achieved. It has 175,000 sqm of leases and renewals, with logistics and industrial (L&I) rental reversions came in at 21.3% higher (outgoing vs incoming) and 41.8% higher (average vs average).
The trust has also continued its prudent capital management, with 4.9x interest coverage ratio, as compared to 5.0x in the previous quarter. The trailing 12-month borrowing cost stands at 2.9%, while the trailing three-month borrowing cost is at 3.1%.
Over $750 million of undrawn facilities are currently available. The trust’s aggregate leverage has increased to 36.2%, mainly due to debt-funded acquisition of a logistics property in Singapore, distribution payment and softening of AUD, EUR and GBP against the SGD.
Over 87% of the trust’s portfolio by gross floor area (GFA) is green-certified of pursuing green certification as at Dec 31, 2024.
On the outlook, the trust continues to prefer strategic locations for its core L&I properties to drive demand for modern logistics facilities. It has noticed a positive population growth, particularly in Australia that supports the L&I demand.
The trust notes that with supply chain resilience leading to higher inventory levels and nearshoring will support warehouse demand, evidenced by rental growth & high take-up rates for L&I. The continued growth in e-commerce is also expected to translate into demand for modern logistics and warehousing solutions.
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However, the trust notes that the interest rate and foreign exchange environment will remain uncertain in 2025.
Units in FLCT closed at 88 cents.
