On 7 May 2025, Frasers Logistics & Commercial Trust (“FLCT”) have announced their half year result for FY2025. Do note that while the overall assessment is favorable, FLCT has seen a continued decrease in share price and DPU over the last few periods. Despite the decrease in share price from the previous article, the price to book ratio remains unchanged, indicating that the net asset value of the REIT continues to decrease as well.
DPU also continues to decrease with the increasing finance costs, which is unlikely to change anytime soon in view of the uncertainty in the global economic environment and the tariff landscape. With the decrease in share price, this has allowed for the dividend yield to remain favorable during the quarter assessment. The idea of exposure to Australia logistics and industrial properties is currently still appealing to me and will continue to monitor if there are any significant changes over the next few quarters for signs of recovery. However, investors will need to assess their individual risk appetite.
Disclaimer: Not financial advice. All data and information provided on this site is for informational purposes only.
Website: Financial Statements And Related Announcement::Half Yearly Results
Photo source: https://fifthperson.com/2023-frasers-logistics-commercial-trust-agm/
Financial Highlights
Distribution Per Unit (“DPU”)
| Metrics | Current | Previous |
|---|---|---|
| Distribution Per Unit | -9.6% | No Update |
| Rating | Unfavorable | Unfavorable |
DPU for the first half of FY2025 has decreased by 9.6% to SGD0.0300 per unit when compared to SGD0.0332 per unit for the second half of FY2024. The main reason for the decrease was due to an increase in finance costs to SGD39 million from SGD36 million, while adjusted net property income remain relatively unchanged. The metric remains Unfavorable.
Occupancy
| Metrics | Current | Previous |
|---|---|---|
| Occupancy | 93.9% | 94.3% |
| Rating | Neutral | Neutral |
Occupancy rate as of 31 March 2025 has decreased slightly to 93.9%. This is contributed by 99.6% for the logistics and industrial assets and 84.1% for their commercial assets. This metric remained Neutral as the overall remains slightly below my expected healthy occupancy rate of 95%.
Gearing ratio
| Metrics | Current | Previous |
|---|---|---|
| Gearing Ratio | 36.1% | 36.2% |
| Rating | Favorable | Favorable |
Gearing ratio as of 31 March 2025 has remained relatively unchanged at 36.1%. The metric currently remains Favorable.
Interest coverage
| Metrics | Current | Previous |
|---|---|---|
| Interest Coverage | 4.5x | 4.9x |
| Rating | Favorable | Favorable |
The interest coverage as of 31 March 2025 has decreased to 4.5 times. The metric remains Favorable as it is significantly above my preferred interest coverage of 3.0 times. The high interest coverage is attributable to their low cost of borrowings of 3.0% for the trailing 12 months and relatively low gearing ratio.
Debt maturity profile
| Metrics | Current | Previous |
|---|---|---|
| Debt Maturity Profile | 2.3 years | 2.0 years |
| Rating | Favorable | Neutral |
Weighted average term to maturity of their debt as of 31 March 2025 has lengthened to 2.3 years. This metric shifted towards Favorable. Do note that approximately 36.0% of their debt will mature by end of FY2026.
Price to Book Ratio
| Metrics | Current | Previous |
|---|---|---|
| Price to Book Ratio | 0.76 | 0.76 |
| Rating | Favorable | Favorable |
The Price to Book (“P/B”) ratio remains relatively unchanged at 0.76. This is computed using the closing share price of SGD0.820 per share on 13 June 2025 and the net asset value per share of SGD1.08 as of 31 March 2025. The P/B ratio is Favorable as it is still a discount from book value.
As of 13 June 2025, the Market Capitalization is approximately SGD3,091 million.
Website: Yahoo Finance: Frasers Logistics & Commercial Trust (BUOU.SI)
Dividend
| Year | Yield | Total |
|---|---|---|
| 2025 | 3.66% | SGD 0.030 |
| 2024 | 8.29% | SGD 0.068 |
| 2023 | 8.59% | SGD 0.070 |
| 2022 | 9.29% | SGD 0.076 |
| 2021 | 9.37% | SGD 0.077 |
| 2020 | 8.68% | SGD 0.071 |
The dividend payout of SGD0.030 per unit in the first half of the calendar year 2025 is lower than the previous calendar year. As a conservative estimate, the expected dividend payout for the full calendar year 2025 will be extrapolated based on this, amounting to SGD0.060 per unit.
With the closing share price of SGD0.820 per share as of 13 June 2025, this translates to a dividend yield of 7.32%. For my benchmark, a reasonable yield would be around an average of 5.25%. The dividend yield for FLCT is Favorable.
Website: Reasonable Dividend Yield 2025Q2 – 5.25%
Investors will need to take note however, that the DPU has been on a downtrend for the last few years. Therefore, there is a risk that it may continue to decrease which may negatively affect share price.
Interest Rate Sensitivity
The Federal Reserve on 8 May 2025 have kept interest rates unchanged at a range of 4.25% to 4.50%, despite pressure from Trump to lower borrowing costs. The US central bank has warned that President Donald Trump’s tariffs have created “so much uncertainty” that it is unsure what to do about interest rates. The chairman Jerome Powell said the economic fallout from Trump’s tariffs meant it was “not at all clear” what the bank should do next.
Website: Fed holds rates because of tariff ‘uncertainty’
FLCT have disclosed that every potential +50 bps in interest rates on variable rate borrowings is estimated to reduce DPU by 0.10 Singapore cents per annum. With DPU of SGD0.068 per unit for FY2024, this is illustrated as below:
| Change in Interest Rates | Impact on DPU (SG cents) | Change as % of FY2024 DPU |
|---|---|---|
| 50 bps | 0.10 | 1.5% |
| 100 bps | 0.20 | 2.9% |
| 150 bps | 0.30 | 4.4% |
| 200 bps | 0.40 | 5.9% |
Other metrics
Tenant profile
FLCT has an enlarged portfolio covering logistics and industrial properties, CBD commercial assets and office and business parks, FLCT has government related entities, well-established multinationals, conglomerates, and publicly listed companies among its tenants.
The high quality and diverse tenant base provide resilience to the FLCT portfolio across challenging events. The top 10 tenants accounted for only 20.0% and 13.4% of GRI contribution for the logistics & industrial tenants and commercial tenants respectively with no single tenant accounting for more than 5.0% during the period. This provides income diversity to the portfolio.
Summary
| Metrics | Financials | Rating |
|---|---|---|
| Distribution Per Unit | -9.6% | Unfavorable |
| Occupancy | 93.9% | Neutral |
| Gearing Ratio | 36.1% | Favorable |
| Interest Coverage | 4.5x | Favorable |
| Debt Maturity Profile | 2.3 years | Favorable |
| Price to Book Ratio | 0.76 | Favorable |
| Overall | Favorable |
Overall, the fundamentals of FLCT shifted back towards Favorable, due to the lengthening of debt maturity profile. Do note that DPU is on a downtrend due to increasing finance costs, which may continue as the global economic environment is uncertain with the ongoing tariff war. Investors will need to assess their risk appetite.
Background
FLCT is a real estate investment trust (“REIT”) with a portfolio comprising logistic, industrial, and commercial properties diversified across five developed countries – Australia, Germany, Singapore, the United Kingdom (“UK”) and the Netherlands.
FLCT was listed on the Mainboard of Singapore Exchange Securities Trading Limited (“SGX-ST”) on 20 June 2016 as Frasers Logistics & Industrial Trust (“FLT”) and was subsequently renamed FLCT on 29 April 2020 following the completion of a merger with Frasers Commercial Trust (“FCOT”).
FLCT’s investment strategy is to invest globally in a diversified portfolio of income-producing properties used predominantly for logistics or industrial purposes located globally, or commercial purposes (comprising primarily central business district (“CBD”) office space) or business park purposes (comprising primarily non-CBD office space and/or research and development space) located in the Asia-Pacific region or in Europe (including the UK).
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Website: Frasers Logistics and Commercial Trust (SGX: BUOU): 2025 First Quarter Business Update
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