On 31 July 2025, Frasers Logistics & Commercial Trust (“FLCT”) announced their third quarter business update for FY2025. There is a notable decrease in occupancy rate this quarter, mainly arising from the drop in their logistics and industrial portfolio. Together with the increase in their cost of debt, there may be continued downward pressures on their DPU during the period. In turn, the interest coverage ratio of FLCT also continues down trending and is significantly lower than it was years ago.
Do note that the debt maturity profile of FLCT continues to lengthen, with the percentage of borrowings at fixed rates continue to decrease in proportion. This indicates that FLCT is renewing and drawing down borrowings on floating rates, an indication of management forecasting that interest rates will continue to decrease. With the Federal Open Market Committee meeting next week, there may be a clearer picture on the direction that interest rates will head towards.
Subsequent to the result announcement, FLCT announced the issuance of SGD100 million 2.45 per cent notes due 2034 by FLCT Treasury Pte. Ltd. under their multicurrency debt issuance programme on 15 August 2025.
Disclaimer: Not financial advice. All data and information provided on this site is for informational purposes only.
Website: General Announcement::Business Updates For The Third Quarter Ended 30 June 2025
Photo source: https://fifthperson.com/2023-frasers-logistics-commercial-trust-agm/
Financial Highlights
Distribution Per Unit (“DPU”)
| Metrics | Current | Previous |
|---|---|---|
| Distribution Per Unit | No Update | -9.6% |
| Rating | Unfavorable | Unfavorable |
Based on the announcement on 31 July 2025, DPU was not included in the business update for the third quarter of FY2025.
The metric was Unfavorable in the previous quarter as 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.
Occupancy
| Metrics | Current | Previous |
|---|---|---|
| Occupancy | 92.5% | 93.9% |
| Rating | Unfavorable | Neutral |
Occupancy rate as of 30 June 2025 has decreased to 92.5%. This is contributed by 96.7% for the logistics and industrial assets and 85.1% for their commercial assets. The significant decrease in logistics and industrial assets this quarter was due to a tenant exercising break option. Management has disclosed that one-third of the space has already been committed on a back-to-back basis with no downtime. The remaining two-thirds was secured post-quarter end. This metric shifted towards Unfavorable as it is significantly below my expected healthy occupancy rate of 95%.
Gearing ratio
| Metrics | Current | Previous |
|---|---|---|
| Gearing Ratio | 36.8% | 36.1% |
| Rating | Favorable | Favorable |
Gearing ratio as of 30 June 2025 has increased to 36.8%. The increase was due to additional drawdowns during the quarter. The metric currently remains Favorable.
Interest coverage
| Metrics | Current | Previous |
|---|---|---|
| Interest Coverage | 4.1x | 4.5x |
| Rating | Favorable | Favorable |
The interest coverage as of 30 June 2025 has decreased to 4.1 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 3.1% for the trailing 12 months and relatively low gearing ratio.
Debt maturity profile
| Metrics | Current | Previous |
|---|---|---|
| Debt Maturity Profile | 2.6 years | 2.3 years |
| Rating | Favorable | Favorable |
Weighted average term to maturity of their debt as of 30 June 2025 has lengthened to 2.6 years. This metric is Favorable. Do note that approximately 24.5% of their debt will mature by end of FY2026.
Price to Book Ratio
| Metrics | Current | Previous |
|---|---|---|
| Price to Book Ratio | 0.88 | 0.76 |
| Rating | Favorable | Favorable |
Based on the announcement on 31 July 2025, net asset value was not included in the business update for the third quarter of FY2025.
The Price to Book (“P/B”) ratio became more expensive at 0.88. This is computed using the closing share price of SGD0.950 per share on 12 September 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 12 September 2025, the Market Capitalization is approximately SGD3,589 million.
Website: Yahoo Finance: Frasers Logistics & Commercial Trust (BUOU.SI)
Dividend
| Year | Yield | Total |
|---|---|---|
| 2025 | 3.16% | SGD 0.030 |
| 2024 | 7.16% | SGD 0.068 |
| 2023 | 7.41% | SGD 0.070 |
| 2022 | 8.02% | SGD 0.076 |
| 2021 | 8.08% | SGD 0.077 |
| 2020 | 7.49% | SGD 0.071 |
There are no dividend payouts in this quarter. 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 SGD0.950 per share as of 12 September 2025, this translates to a dividend yield of 6.32%. For my benchmark, a reasonable yield would be around an average of 4.75%. The dividend yield for FLCT is Favorable.
Website: Reasonable Dividend Yield 2025Q3 – 4.75%
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 Chair Jerome Powell on 22 August 2025 gave a tepid indication of possible interest rate cuts ahead as he noted a high level of uncertainty that is making the job difficult for monetary policymakers. While he noted that the labor market remains in good shape and the economy has shown “resilience,” he said downside dangers are rising. At the same time, he said tariffs are causing risks that inflation could rise again — a stagflation scenario that the Federal Reserve needs to avoid.
Website: Powell indicates conditions ‘may warrant’ interest rate cuts as Fed proceeds ‘carefully’
The Federal Reserve on 31 July 2025 have left its key short-term interest rate unchanged for the fifth time this year, at a range of 4.25% to 4.50%. Powell also signaled that it could take months for the Fed to determine whether Trump’s sweeping tariffs will push up inflation temporarily or lead to a more persistent bout of higher prices. His comments suggest that a rate cut in September, which had been expected by some economists and investors, is now less likely.
Website: Fed’s Powell sticks with patient approach to rate cuts, brushing off Trump’s demands
FLCT have disclosed that every potential +50 bps in interest rates on variable rate borrowings is estimated to reduce DPU by 0.11 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 | 0.11 | 1.6% |
| 100 bps | 0.22 | 3.2% |
| 150 bps | 0.33 | 4.9% |
| 200 bps | 0.44 | 6.5% |
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 21.1% and 13.7% of GRI contribution for the logistics & industrial tenants and commercial tenants respectively with no single tenant accounting for more than 4.9% during the period. This provides income diversity to the portfolio.
Summary
| Metrics | Financials | Rating |
|---|---|---|
| Distribution Per Unit | No Update | Unfavorable |
| Occupancy | 92.5% | Unfavorable |
| Gearing Ratio | 36.8% | Favorable |
| Interest Coverage | 4.1x | Favorable |
| Debt Maturity Profile | 2.6 years | Favorable |
| Price to Book Ratio | 0.88 | Favorable |
| Overall | Neutral |
Overall, the fundamentals of FLCT shifted to Neutral, due to the notable decrease in occupancy ratio. This is highly likely to affect the DPU during this period, which is currently also facing downward pressures given the macro environment.
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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