FLCT keeps half-year distribution unchanged despite income growth

Frasers Logistics & Commercial Trust (FLCT) reported S$112.5 million in distributable income for its September-ended second half, an increase of 0.8 per cent. Its manager said on Nov 6 that the payout remained S$0.0295 per unit, matching the year-earlier level.

Half-year revenue reached S$255.2 million after rising 6.7 per cent, while net property income increased 8.8 per cent to S$187.6 million. Payment of the distribution is scheduled for Dec 23, with Nov 19 designated as the record date.

The manager said annual rent increases across logistics and industrial properties supported the improvement. Other contributors included currency movements, better occupancy at Alexandra Technopark and logistics acquisitions in Germany and the Netherlands. The sale of 357 Collins Street and higher non-recoverable land taxes in Victoria and Queensland partly offset those gains.

Financing expenses increased 8.2 per cent to S$47.1 million as refinanced loans attracted higher rates and acquisitions required additional debt. Lower income tax expenses helped distributable income, but the proportion of management fees settled in units dropped to 75 per cent from 96 per cent.

For the full year, FLCT recorded revenue of S$494.1 million, up 4.8 per cent, and adjusted net property income of S$347.6 million, up 6.6 per cent. Its distribution per unit fell 0.8 per cent to S$0.059.

At September’s close, occupancy across the portfolio was 96.2 per cent. The trust’s 118 properties had a valuation of S$7.2 billion, which was 2.3 per cent below carrying value.

The manager expects FY2027 borrowing costs to increase because of variable-rate debt and refinancing. It also said elevated bond yields could put pressure on property valuations.