Frasers Logistics Trust DPU Flat Despite Revenue Gain
Frasers Logistics & Commercial Trust reported a second-half distribution per unit (DPU) of S$0.0295, unchanged from a year earlier, yielding an annualised 6.7 per cent based on the unit’s S$0.88 closing price on 30 September.
The DPU will be paid on Dec 23 after a record date of Nov 19. Excluding a capital distribution of divestment gains amounting to S$70,000, the DPU would have risen 7.1 per cent to S$0.0288 from S$0.0269.
Distributable income for the six-month period edged up 0.8 per cent to S$112.5 million, versus S$111.7 million a year earlier. Without capital distributions, it increased 7.6 per cent to S$109.5 million from S$101.8 million.
The rise stemmed from lower income-tax expenses, but higher finance costs and a reduced management-fee proportion—75 per cent of units versus 96 per cent previously—partially offset the gain.
Revenue grew 6.7 per cent to S$255.2 million, while net property income (NPI) climbed 8.8 per cent to S$187.6 million.
Adjusted Performance and Acquisitions
Adjusted NPI, which excludes straight-lining adjustments and adds lease payments for right-of-use assets, rose 9.6 per cent year-on-year to S$180.6 million.
Management attributed stronger revenue and NPI to higher annual increments in its logistics and industrial portfolio and to favourable exchange-rate movements for the Australian dollar and euro against the Singapore dollar.
Higher occupancy at Alexandra Technopark and recent acquisitions of logistics properties in Germany and the Netherlands also lifted performance.
These gains were partially offset by the divestment of 357 Collins Street in September 2025 and increased non-recoverable land taxes in Victoria and Queensland, Australia.
Full-Year Results and Portfolio
Finance costs rose 8.2 per cent to S$47.1 million, driven mainly by higher interest rates on refinanced borrowings and additional debt drawn for acquisitions.
For the full year ended September, the DPU slipped 0.8 per cent to S$0.059 from S$0.0595, and total distributable income fell 0.1 per cent to S$224.4 million.
Revenue increased 4.8 per cent to S$494.1 million, while adjusted NPI grew 6.6 per cent to S$347.6 million. Overall portfolio occupancy stood at 96.2 per cent, with logistics and industrial properties at 99.1 per cent and commercial assets at 89.7 per cent.
The trust achieved average rental reversions of 10.4 per cent on an incoming-rent basis and 24 per cent on an average-rent basis for FY 2026.
Its 118-property portfolio across five countries was valued at S$7.2 billion, down 2.3 per cent from carrying value, reflecting vacancies, yield softening and weaker European currencies, though positive rental reversions and a stronger Australian dollar offered support.
Commercial property valuations fell 8.7 per cent versus carrying value, compared with a 0.4 per cent decline for logistics and industrial assets. Net asset value per unit dropped to S$1.07 from S$1.10.
Outlook and Leverage
The manager expects borrowing costs to rise in FY 2027, reflecting higher rates on variable-rate borrowings and debt due for refinancing.
Asset valuations may face pressure as interest rates on bonds have increased, yet the structural case for prime logistics and industrial assets stays compelling, underpinned by e-commerce growth, supply-chain resilience and nearshoring.
As of 30 September, aggregate leverage stood at 39.2 per cent, with a weighted-average debt maturity of 3.1 years and an interest-coverage ratio of 4.5 times.
The average cost of borrowing increased to 3.2 per cent per annum from 3.1 per cent, with 70.9 per cent of debt locked in fixed-rate terms.
Ongoing geopolitical and trade uncertainties have not materially affected operations, occupancy or leasing commitments. Units closed Thursday 1.7 per cent higher at S$0.925.
