The additional industrial supply did not hinder demand from flourishing in Sydney.
Soaring demand in Sydney and Melbourne could work well for Frasers Logistics Industrial Trust (FLT) despite the increase in industrial supply, OCBC Investment Research (OIR) said.
They noted that demand in Sydney is especially sustained.
“For Melbourne, prime grade net face rents rose 1.1% YoY to A$92 psm p.a. ($92.75),” OIR said.
The firm mentioned that Brisbane also recorded signs of stabilisation as rents rose 0.9% QoQ after 2 consecutive quarters of flat rentals.
Moreover, OIR is positive on FLT’s Europe acquisition and the proposed divestment of its 80 Hartley Street property.
FLT saw a 22.4% YoY increase in its net profit to $30.9m (A$30.67m) in Q3 2018, as its gross revenue jumped 22.6% to $49.7m (A$49.32). The firm’s adjusted net property income (NPI) rose 27.4% to $39.6m (A$39.2m) whilst its distribution per unit (DPU) inched up 2.9% to $0.18.
“Leasing activity during the quarter was also buoyant, with 118,279 sq m of leasable space contracted, de-risking our expiry profile further,” FLT CEO Robert Wallace said.
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