Date: October 18, 2024
Broker: CGS International Securities Pte. Ltd.

Overview of Frasers Logistics & Commercial Trust (FLCT)

Frasers Logistics & Commercial Trust (FLCT) is a real estate investment trust (REIT) focused on acquiring and managing a diverse portfolio of logistics and commercial properties across various regions. FLCT has assets in several countries, including Australia, Germany, and the Netherlands.

Key Development: Maiden Purchase in Singapore’s Logistics Sector

FLCT has announced its first foray into the Singapore logistics property market. This acquisition marks a strategic expansion for the trust, further diversifying its portfolio by adding a new geographical market.

Financial Details and Funding

• Debt-Funded Acquisition: The purchase will be financed through debt, aligning with FLCT’s strategy of optimizing its capital structure while maintaining a stable financial position.
• Distribution Per Unit (DPU) Accretive: The transaction is projected to be accretive to DPU, implying that it will enhance earnings for investors without diluting the value of existing shares.

Investment Recommendation

• Rating: The broker, CGS International Securities, has reiterated an “Add” rating for FLCT, reflecting a positive outlook.
• Target Price: The target price remains unchanged at S$1.35, suggesting continued growth potential following this acquisition.

Strategic Implications

The move into Singapore’s logistics sector is a significant step for FLCT, as it expands its footprint in a region that boasts a strong and growing logistics industry. The strategic acquisition supports FLCT’s long-term goal of broadening its asset base and enhancing income stability across multiple regions.