Frasers Logistics & Commercial Trust posts 13.8% lower H1 DPU of S$0.03

Frasers Logistics and Commercial Trust (FLCT) on Wednesday (May 7) posted a 13.8 per cent fall in distribution per unit (DPU) to S$0.03 for its first half ended March 31, from S$0.0348 in the corresponding period in the previous year.

This decline reflects transitional challenges in the commercial portfolio and foreign exchange volatility in a higher interest-rate environment, according to the manager of the real estate investment trust (Reit).

It will be paid out on Jun 18, and represents an annualised distribution yield of 6.5 per cent, based on the annualised DPU and market closing price of S$0.92 per unit as at Mar 28 (the last trading day of that month).

Revenue improved by 7.5 per cent to S$232.3 million for the period from S$216 million in H1 FY2024, while net property income (NPI) rose by 5.4 per cent to S$167.4 million from S$158.8 million in the same period a year prior.

Adjusted NPI, which excludes straight lining adjustments for rental income and adds lease payments of right-of-use assets, increased by 1.6 per cent to S$161.3 million for the period from S$158.7 million.

Distributable income decreased by 13.5 per cent to S$113 million for H1 FY2025 from S$130.7 million in the corresponding year-ago period, after taking into account the higher finance costs, higher tax expense and 56.9 per cent of H1 FY2025 management fees paid in the form of cash.

BT in your inbox

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

The finance costs were higher mainly due to the increase in interest rates and additional borrowings drawn for fund through developments and acquisitions, the manager of the Reit explained.

FLCT’s gearing stayed steady at 36.1 per cent as at Mar 31, with a weighted average debt maturity of 2.3 years and interest coverage ratio of 4.5 times.

Looking ahead, the manager said that FLCT will continue to actively optimise occupancies of its commercial assets through proactive asset management and competitive marketing initiatives.

Anthea Lee, chief executive officer of the Reit manager, said: “It remains our priority to pursue strategic growth opportunities in the resilient logistics and industrial segment, while simultaneously evaluating the potential divestment of non-core office assets to optimise our portfolio composition.”

She added that deliberate steps are being taken to preserve debt headroom for long-term growth and value creation, while being mindful of the concerns associated with significant DPU fluctuations.

Units in FLCT ended Tuesday at 0.6 per cent or S$0.005 higher at S$0.905.