FRASERS Logistics & Commercial Trust (FLCT) will join the FTSE Straits Times Index (STI) on April 13.

 

Following the latest review of the STI by FTSE Russell, FLCT will replace Jardine Strategic Holdings (JSH)

 

Robert Wallace, chief executive officer of the manager of FLCT, said: " We are delighted that FLCT will be included as a constituent of the STI."

 

He added: " Our inclusion into the benchmark index for the Singapore stock market bears testament to the progress we have made as a listed real estate investment trust (Reit), which we trust will further elevate FLCT' s profile and visibility with global investors."

 

The STI, Singapore' s main stock market benchmark, is a market capitalisation weighted index that tracks the performance of the top 30 companies listed on the Singapore Exchange (SGX).

 

It is jointly calculated by FTSE Russell, the index administrator Singapore Press Holdings, which publishes The Business Times and SGX.

 

FLCT will join six other Reits on the STI, namely Ascendas Reit, CapitaLand Integrated Commercial Trust, Keppel DC Reit, Mapletree Commercial Trust, Mapletree Industrial Trust and Mapletree Logistics Trust.

 

In a research note published last month anticipating FLCT' s inclusion in the STI, CGS-CIMB said it likes FLCT for its exposure to the logistics warehouse sector, which will continue to ride on the e-commerce uptrend, as well as the trust' s visible inorganic growth potential and income resilience.

 

Meanwhile, Jardine Matheson Holdings had announced in March that it will simplify the parent company structure of the group by acquiring the 15 per cent of JSH that it does not own.

 

THE Covid-19 pandemic has not had a material impact on the portfolio of Frasers Logistics & Commercial Trust (FLCT) to-date, said its manager in a business update on Wednesday.

 

In a bourse filing late on Wednesday, FLCT' s manager said that Covid-19' s impact on its distributable income in the first quarter of FY21 was approximately S$0.7 million, which has not been material for the real estate investment trust (Reit). This mainly includes rental waivers granted and Covid-19-related provisions.

 

However, the manager said that a near- to mid-term impact on the retail components of its Singapore and Australian portfolio is expected. It noted that the commercial portfolio remains largely stable, with the retail segment representing " just 2.4 per cent" of FLCT' s overall income.

 

Meanwhile, FLCT' s manager expects impact to be " limited" on its industrial properties in Australia, Europe and the UK. It is actively monitoring the impact of the latest UK national lockdown on the physical occupancy and performance of the UK properties.

 

It is more optimistic about the demand for its logistics and suburban office spaces, saying that structural changes driven by the growth of e-commerce activities and the " hub-and-spoke" trend are expected to drive demand for these spaces respectively. FLCT' s logistics portfolio continued operating during the pandemic, it added.

 

Overall, FLCT' s portfolio performance was " stable" during the quarter and was underpinned by active lease management, with new leases and renewals amounting to 63,546 sq m of space or 2.9 per cent of the Reit' s lettable area. FLCT recorded a portfolio rental revision of -6.9 per cent for Q1 FY21, down 2.1 per cent for the 12-month period to Dec 31.

 

FLCT' s occupancy rate stood at 97.2 per cent, and the weighted average lease expiry was 4.8 years. The manager said FLCT has a well spread-out lease expiry profile, with 5.5 per cent of gross rental income (GRI) due for renewal in FY21.

 

Eight industrial and 40 commercial leases are expiring in FY21, but each accounts for less than or equal to 0.4 per cent of GRI.

 

The manager also added that FLCT had a " well-spread" weighted average debt maturity profile of 3.1 years as at Dec 31, and is " confident" on refinancing the debt maturing in FY2021 with existing undrawn and new facilities. FY2021 borrowings are expected to be partially paid down, with proceeds from the divestment of its ownership in three leasehold industrial properties in South Australia, it said.

 

Its debt headroom stood at S$1.8 billion, prior to reaching the 50.0 per cent aggregate regulatory leverage limit.

 

THE manager of Frasers Logistics & Commercial Trust (FLCT) has entered into a sales and purchase agreements to divest three leasehold industrial properties in South Australia, it said on Thursday.

 

The total consideration for the properties is A$29.6 million (S$29.5 million), which represents a 19.4 per cent premium to their book value of A$24.8 million as at Sept 30, 2020, the manager said in the exchange filing.

 

It is also above the total original purchase consideration of A$28.7 million at FLCT' s initial public offering in 2016.

 

" The proposed divestments of three non-core leasehold properties in South Australia, with an attractive premium relative to market value, are part of our proactive asset management strategy and in line with our continuing focus on core industrial markets on the eastern seaboard of Australia," said Robert Wallace, chief executive officer of FLCT' s manager.

 

" The divestment proceeds will also provide us with greater financial flexibility to manage FLCT' s capital," he added.

 

The portfolio to be divested is located within Burbridge Business Park in the north-western corner of Adelaide Airport, which is approximately seven kilometres west of Adelaide' s central business district.

 

As at Sept 30, the portfolio accounted for approximately 0.9 per cent of FLCT' s net property income and 0.4 per cent of its portfolio value.

 

The proposed divestment is expected to be completed by March 31, 2021, with estimated net proceeds of around A$28.1 million, after taking into account outstanding incentives, divestment fees and other expenses.

 

The net divestment proceeds may be used for funding potential acquisition opportunities, reducing existing debt and/or other general corporate purposes, the manager said.