To The Moon

🌟🌟🌟$Frasers L&C Tr(BUOU.SI)$  Frasers Logistics & Commercial Trust (FLCT) is one of the largest SReits listed in the SGX with a portfolio comprising of 112 logistics  and commercial properties worth SGD 6.9 billion.  The properties are diversified across 5 developed markets in Australia, Germany, Singapore, the United Kingdom and the Netherlands.

FLCT's investment strategy is to invest globally in a diversified portfolio of income producing properties.  These are predominantly for logistics, industrial purposes,   commercial and business parks.  With strong connectivity to key infrastructure, FLCT's portfolio largely consists of freehold and long leasehold land tenure assets with a well diversified tenant base.

FLCT released its 3QFY24 business update  on 31 July 2024.  There was positive portfolio rental reversions of 14.8% for space leased across the portfolio in 3QFY 24.  FLCT improved its portfolio occupancy by 95%, up 0.7% from 31 March 2024.

Among the Top 10 largest SReits, FCLT is the lowest geared with 33.2% aggregate average and interest coverage of 5.7 times.   The maximum allowed for SReits is 50%.

FLCT has a well diversified portfolio with Weighted Average Lease Expiry (WALE) of 4.8 years for its 104 Logistics & Industrial properties and 3.2 years WALE for its 8 Commercial properties.

FLCT has a prudent capital management in place with 2.0 years average weighted debt maturity.  72.6% of its borrowing are at Fixed Rates.  Cost of borrowing is 2.6% for the trailing 12 months.

FLCT's leased 90,000 sqm in 3QFY24, bringing total space leased in YTD FY24 to 233,000 sqm.  FLCT has a well diversified tenant base with its top 10 tenants accounting for 23% of its portfolio.  No single top 10 tenant contributed to more than 5% of the rental income.   Its Top tenant is the Commonwealth of Australia Government at 4.6%, followed by Hermes of Germany at 3.6%, Google at 2.3% in Singapore, Rio Tinto at 2.2% in Australia and many more. 

FLCT is very much focused on maintaining sustainable practices and development.  It has received a 5 star GRESB rating since 2017.  It has solar panels installed across its portfolio, producing more than 11MW of power at peak. 

FLCT said that key trends affected its operating environment. These include gradual monetary policy easing with the reduction of interest rate cycle starting to buoy investment market confidence.   Logistics companies are leveraging digital platforms, AI and Robotics to streamline their operations and improve efficiency.  

FLCT has recently announced its acquisition of a prime logistics property - 2 Tuas South Link 1 in Singapore at the cost of SGD 140.3 million on October 17.  The purchase price represents a discount of 2.5% from its appraised value.  After the proposed acquisition, FLCT's Singapore portfolio will increase from 9.8% to 11.6%.

FLCT pays its distributions twice a year on 31 March and 30 September.  The current distribution yield is a nice juicy 6.43%.

Performance wise FLCT is trading at a narrow band width of SGD 1.07 to SGD 1.08 in the past 5 days.  However it is down 6% year todate. 

Financial Analysts are Bullish on FLCT with a Buy rating, Target price of SGD 1.44, an upside potential of 34%.  DBS Group Research said that FLCT has a strong balance sheet, low gearing and large cash balance. 

FLCT also has a strong sponsor in Frasers Property which is a multinational real estate and property management group that develops, owns and manages properties globally.  The Group is owned by Thai Chinese billionaire Charoen Sirivadhanabhakdi and is headquartered in Singapore. 

Is FLCT a Buy?  That is a YES from me as it is undervalued and has lots of upside potential.   I also like that it is well managed, has a low gearing ratio and a great distribution yield of 6.43%.  Maximum value, low cost - A Winning SReit! 

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