Positive Outlook on Frasers Logistics & Commercial Trust Driven by Strong Performance and Growth Potential

Frasers Logistics & Commercial Trust, the Real Estate sector company, was revisited by a Wall Street analyst on November 7. Analyst Lock Mun Yee from CGS-CIMB reiterated a Buy rating on the stock and has a S$1.10 price target.

Lock Mun Yee’s rating is based on several positive indicators for Frasers Logistics & Commercial Trust (FLCT). The trust reported a notable increase in revenue and net property income in the second half of FY25, driven by contributions from its Singapore industrial property and improved income from UK business parks. Despite some challenges, such as higher vacancies and increased land taxes, FLCT’s overall portfolio occupancy rose significantly, particularly in the logistics and industrial segment, which achieved a near-full occupancy rate.
Furthermore, FLCT’s management has demonstrated a commitment to optimizing returns through proactive asset management and exploring growth opportunities, particularly in the logistics and industrial sector. The trust’s robust balance sheet supports its potential for inorganic growth, and while the dividend per unit estimates have been slightly adjusted, the projected dividend yield remains attractive. The key catalyst for re-rating is the potential for accretive new acquisitions, although risks such as macroeconomic challenges and the ability to make beneficial purchases remain. Overall, these factors contribute to the Buy rating assigned by Lock Mun Yee.

Mun Yee covers the Real Estate sector, focusing on stocks such as CapitaLand Investment Limited, Keppel REIT, and CapitaLand Ascendas REIT. According to TipRanks, Mun Yee has an average return of 6.4% and a 56.49% success rate on recommended stocks.

In another report released today, DBS also maintained a Buy rating on the stock with a S$1.05 price target.