Frasers Logistics & Industrial Trust's property on Pearson Road in Brisbane. (Photo: Frasers Logistics & Industrial Trust)Frasers Logistics & Industrial Trust's property on Pearson Road in Brisbane. (Photo: Frasers Logistics & Industrial Trust)

Frasers Logistics & Industrial Trust has reported a DPU of 1.74 Singapore cents for the reporting period of 1 October to 31 December 2016, beating forecast of 1.64 cents for the period made during IPO by 6.1%.

However gross revenue and adjusted net property income for the period missed forecast by 1.5% and 0.6%, coming in at SGD39.7 million (USD28 million) and SGD30.7 million respectively, although distributable income beat expectations by 5.1% at SGD24.9 million.

The REIT has attributed the higher distributable income and DPU mainly to interest savings from a lower actual weighted average interest rate of 2.8% instead of 3.4% per annum as originally predicted.

But a delay in exercising and acquiring the Martin Brower call option property to 30 November 2016, from 1 October 2016, caused it to miss its gross revenue forecast, said the REIT.

Frasers Logistics & Industrial Trust’s gearing for the period was at 29.7% with total borrowings of AUD540 million (USD412 million).

Aggregate portfolio occupancy for the period improved to 99.3% as at 31 December 2016, up from 98.3% at listing, with a weighted average lease expiry (WALE) of 6.9 years by gross rental income.

For the quarters ahead, the Singapore-listed industrial REIT expects demand for prime grade industrial assets in Australia to be well-supported by continued residential construction, government infrastructure spending, and growth of third-party logistics providers, retailers, and e-commerce.

“Leveraging on the positive industrial market dynamics in Australia and the strength of our portfolio, we will continue to pursue growth opportunities for the benefit of our stakeholders”, said Robert Wallace, CEO of the REIT’s manager, in a statement on the results.

“The REIT manager currently expects [Frasers Logistics & Industrial Trust] to meet the FY2017 DPU forecast of 6.50 Singapore cents contained in the prospectus barring any unforeseen circumstances”, the REIT added.

Units of Frasers Logistics & Industrial Trust’s finished the trading day about 1% higher from its previous close on the Singapore Exchange to end at SGD0.95.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.