COMMERCIAL PROPERTY | Staff Reporter, Singapore

Frasers Logistics & Industrial Trust NPI jumped 43.3% to $45.97m in Q2

Earnings were bolstered by its 2018 and 2019 acquisitions in Europe and Australia.

Frasers Logistics & Industrial Trust’s (FLT) net property income (NPI) soared 43.3% YoY to $45.97m (A$47.87m) in Q2 from $32.09m (A$33.41m), an announcement revealed. Revenue for the quarter also jumped 36.9% YoY from $41.85m (A$43.58m) to $57.3m (A$59.67m).

The increases reportedly took into account contributions from FLT’s FY 2018 and 2019 European, Australian and Dutch acquisitions, which were partially offset by the divestment of two Australian properties in August 2018.

Distributable income was correspondingly 42.7% higher YoY at $35.45m (A$36.91m) from $24.84m (A$25.9m) in 2018. Distribution per unit (DPU) however dropped 2.8% YoY to $0.0176 from $0.0181.

Also read: Frasers Logistics and Industrial Trust's European debut to boost DPU: analysts

For H1, NPI climbed 44.9% YoY to $92.96m (A$96.8m) from $64.16m (A$66.81m), whilst revenue rose 38.6% YoY from $82.60m (A$86m) to $114.47m (A$119.19m). Distributable income also grew 42.3% YoY to $70.69m (A$73.61m), whilst DPU dipped 1.9% YoY to $0.0354.

In Q2, FLT executed a 24,732 sqm, 10-year lease extension for its CHEP property at 468 Boundary Road, Derrimut, Victoria, Australia. The lease renewal is expected to have an annual fixed rental increase of 2.5%.

“The CHEP Property renewal also provided an asset enhancement initiative (AEI) through the acquisition of an adjacent 12,320 sqm freehold site at 59A Foxley Court, Derrimut for $768,305.15 (A$800,000) from Frasers Property Australia. The asset enhancement will involve a 11,209 sqm expansion to the existing hardstand area and an upgrade of the existing facilities, including an office refurbishment as well as car park expansion,” FLT said. The expected return on the AEI is approximately 8%.

On 29 March 2019, Frasers Logistics & Industrial Asset Management announced the proposed divestment of a non-core property located at 63-79 South Park Drive, Dandenong South, Victoria, Australia for $17.25m, representing a 13.1% premium to its book value of $14.65m (A$15.25m), and is expected to be completed by H1 2019.

As at 31 March 2019, FLT’s portfolio remained at near full occupancy of 99.6%, with a weighted average lease expiry (WALE) by gross rental income (GRI) of 6.61 years, and minimal lease expiries by GRI of 1.3% for the financial year ending 30 September 2019.

“Looking forward, we will continue to manage and explore opportunities for growth and maximise our portfolio’s potential. The prime logistics sector across our key markets of Germany, Netherlands as well as the eastern seaboard of Australia remain well-supported by investments in infrastructure and an expanding e-commerce market,” FLT CEO Robert Wallace commented. 

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