Frasers Logistics & Commercial Trust (BUOU) Q3 2024 earnings summary

Executive summary

• Delivered robust operating performance in 3Q FY2024, anchored by strong leasing momentum and positive rental reversions across key markets.

• Portfolio occupancy improved to 95%, up 0.7 percentage points from 31 March 2024, with 90,000 sq m leased or renewed during the quarter.

• Portfolio comprises 112 properties valued at S$6.9 billion across five developed countries, with logistics and industrial assets accounting for over 70% by value.

Financial highlights

• Aggregate leverage as of 30 June 2024 stands at 33.2%, the lowest among the 10 largest S-REITs.

• Interest coverage ratio was 5.7x, with S$793 million debt headroom before reaching 40% leverage.

• Trailing 12-month cost of borrowings rose slightly to 2.6%; 3Q FY2024 cost of debt at 2.8%.

• 72.6% of borrowings are hedged at fixed rates; 57% of borrowings are green or sustainability-linked.

Outlook and guidance

• Construction of the Maastricht project in the Netherlands is progressing on track for completion in 1H FY2025, fully leased on a 10-year term and targeting BREEAM "Very Good" certification.

• Sustained demand for quality, core, and sustainable properties expected, with occupiers prioritizing strategic locations and sustainability credentials.

• Gradual monetary easing anticipated as inflation and recession risks subside, potentially boosting investment confidence.

• Geopolitical considerations and megatrends like digitalization and AI are expected to support warehouse demand and operational efficiency.