DBS sees bright spots in Australia for Frasers industrial and hospitality REITs

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There are “bright spots” in the Australian logistics and tourism sectors, and these are expected to bode well for Singapore-listed Frasers Logistics & Industrial Trust, and Frasers Hospitality Trust respectively, said DBS in a research note on 30 May.

Frasers Logistics & Industrial Trust is an industrial REIT with 54 properties across Australia, while Frasers Hospitality Trust is a stapled security with assets across nine cities including Singapore, Melbourne, and Sydney.

“Given limited incoming supply in the next few years, we believe that they are able to deliver higher returns as demand for logistics space and hotels remains firm”, said DBS.

The former currently features an aggregate portfolio occupancy of 99.3% with a weighted average lease expiry (WALE) of 6.7 years, and gross leasable area (GLA) of 1.23 million square metres.

Despite the projected growth in demand for logistics spaces, there is a lack of new supply in industrial properties in the REIT’s key markets of Sydney, Melbourne and Brisbane, said DBS, adding that it expects rental outlook in these cities to remain firm.

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Ridzwan Rahmat has been analysing Singapore-listed REITs and business trusts, since 2008. For disclosure purposes, Ridzwan is currently vested in Mapletree Greater China Commercial Trust, Mapletree Industrial REIT and Mapletree Logistics Trust.

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