Frasers Logistics & Industrial Trust - Investor Presentation May 2019 - Frasers Property
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Frasers Logistics &
Industrial Trust
Investor Presentation
May 2019
FrieslandCampina
Otto-Hahn
DSVCHEPFacility,
Facility,
Straße,
FacilityMeppel,
Venlo, theNetherlands
Vaihingen, Netherlands
, Victoria,
The Germany
Australia
Contents
FLT Overview
Portfolio and Asset Management
Key Markets Overview
Strategy and Conclusion
Additional Info: 1HFY19 Financial Overview
2
FLT Overview
Clifford HallamLGI Facility,Victoria,
Facility, Freiberg,Australia
Germany
Introduction to FLT
Frasers Logistics & Industrial Trust
A SGX-ST listed real-estate investment trust with a quality portfolio
concentrated within major logistics and industrial markets in Australia,
82 Germany and the Netherlands
properties
A$3.0 billion 1,964,443 sq m 99.6%
Portfolio Value(1) Gross Lettable Area (“GLA”) Occupancy Rate(2)
A High Quality The Netherlands,
9.2%
Portfolio Australia,
Other Leasehold,
8.3%
66.5%
Focused on Regions(1) Land Freehold,
Major Developed Germany, >80 Years Leasehold,
Tenure(1) 70.2%
24.3% 21.5%
Logistics
Markets
1. Based on the appraised value of FLT’s portfolio as at 30 September 2018. Based on an exchange rate of €1:A$1.5905 for the properties in Germany and the Netherlands
2. By Gross Rental Income (“GRI”), being the contracted rental income and estimated recoverable outgoings for the month of 31 March 2019. Excludes straight lining rental
adjustments
4
Key Milestones (IPO to September 2018)
June 2016 August 2016 November 2016 June – October 2017
Acquired 3rd Call 1st Portfolio Acquisition: 7 Properties in Australia
Acquired Two Call Option(1) Properties
Option(1) Property
• Portfolio Price: A$169.3mm
• GLA: 124,527sqm
• Occupancy: 100%(3)
Listed on the
• WALE(2): 9.6 years
SGX-ST on
111 Indian Drive, Keysborough, VIC 143 Pearson Road, Yatala, QLD 1 Burilda Close, Wetherill Park, NSW
20 June 2016
(51 Properties) • Property Price: • Property Price: • Property Price: Private Placement
A$32.5 mm A$36.7 mm A$58.2 mm
• GLA: 21,660 sq m • GLA: 30,618 sq m • GLA: 18,848 sq m • Private placement of 78 mm new units in FLT at an issue price of
• Occupancy: 100% • Occupancy: 100% • Occupancy: 100% S$1.01 per Unit.
• WALE(2): 15.0 years • WALE(2): 6.0 years • WALE(2): 20.0 years • The new issuance was 4.62 times subscribed
May 2018 August 2018 September 2018
2nd Portfolio Acquisition:
Divested Two Non-core Properties Acquired Two New Australian Properties
21 Properties in Germany and the Netherlands
• Portfolio Price: €596.8 mm Lot 102 Coghlan Road, Outer Harbor, South
• GLA: 620,786 sq m Australia
• Occupancy: 100%(4) • Sale Consideration: A$8.75 mm
• WALE(2): 8.0 years • Book Value: A$6.4 mm
• Premium to Book Value: 36.7% 3 Burilda Close, Wetherill Park, NSW 103-131 Wayne Goss Drive, QLD
Equity Fund Raising
• Property Price: A$31.5 mm • Property Price: A$31.1mm
80 Hartley Street, Smeaton Grange, New South
• Launch of equity fund raising to raise S$476 mm by way of: • GLA: 20,078 sq m • GLA: 19,487 sq m
Wales, Australia
– Private placement (3.9 times subscribed) • Occupancy: 100% • Occupancy: 100%
• Sale Consideration: A$90.5 mm
• WALE(2): 7.0 years • WALE(2): 4.2 years
– Preferential offering (1.9 times subscribed) • Book Value: A$64.5 mm
• Premium to Book Value: 40.3%
1. In relation to call option agreements entered into at FLT’s IPO
2. Refers to the weighted average leas expiry (“WALE”) based on GRI as reported in the respective acquisition announcements 5
3. Including pre-committed leases for the three development properties
4. Based on 100% interest in the properties acquired and on the basis of the completion of the committed asset enhancement works (where applicable)
Key Developments in the Year-to-Date
Acquired a Prime, Freehold Logistics • Property Price: €25.36 mm(1)
• GLA: 31,013 sq m
Property in the Netherlands • Occupancy: 100%
on 31 October 2018 • WALE(2): 14.6 years
Mandeveld 12, Meppel, the Netherlands
Included in the FTSE EPRA/NAREIT
Developed Index • Entry into a leading benchmark index for institutional real-estate investors
• Unit price up approximately 4.6%(3) with higher daily average volume
since 18 March 2019
• Completed 46,078 sq m of leasing/renewals in Australia, with reversion of -6.3%
Healthy Leasing Momentum • Includes a 10-year lease extension and asset enhancement for the property at
468 Boundary Derrimut, Victoria, Australia
• 29 March 2019: Announced divestment of 63-79 South Park Drive in Victoria for
A$17.25 mm, representing a 13.1% premium to book value of A$15.25 mm(4)
Strategic Divestments in Australia • 16 May 2019: Announced partial divestment of 610 Heatherton Road in Victoria for
A$15.0 mm, representing a 11.1% premium to the apportioned book value of
A$13.5 mm(5)
63-79 South Park Drive, Dandenong South, Victoria
1. Negotiated on a willing-buyer and willing-seller basis and supported by independent valuations conducted by CBRE Ltd. and Colliers International Valuation UK LLP as at 1 October 2018 based on 100% interest in the property as set out in the
announcement dated 31 October 2018
2. Based on GRI as reported in the acquisition announcement
3. For the period from 28 February 2019 (Being the inclusion announcement date) to 16 May 2019
4. Based on the valuation by CIVAS (VIC) Pty Limited (“Colliers”) as at 30 September 2018
5. Apportioned book value of the warehouse and hardstand components based on the valuation by Savills Valuation Pty Ltd as at 15 April 2019. The total book value of the property as at 15 April 2019 was A$18.0 million. 6
Delivering Stable Distributions
Distribution Policy
– FLT makes distributions to its Unitholders on a semi-annual basis, with the amount calculated as at 31 March and 30
September each year for the six-month period ending on each of the said dates
– Unitholders will receive their Distribution in Singapore dollars, unless they elect to receive their Distribution in Australian
dollars by submitting a completed "Currency Election Notice" to CDP
Includes DPU of 0.10 Singapore
cents (0.10 Australian cents)
for the period from 20 Jun to
30 Jun 16
1.85 1.84
1.80 1.81 1.80 1.81 1.82
1.78 1.78 1.78
1.74 1.74 1.75 1.75 1.75 1.75 1.75 1.77 1.76 1.76
1.70 1.70
20 Jun - 30 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19
Sep 2016
Australian Cents Singapore Cents
7
Attractive Trading Fundamentals
Trading Performance since IPO (20 June 2016 – 16 May 2019)
SGX Stock Code: BUOU
FLT units rose by approximately 29.2% Bloomberg: FLT:SP
Reuters: FRAE.SI
for the period from 20 June 2016 to
135%
16 May 2019; outperforming the FTSE ST REIT Index Closing Price
130% (16 May 2019):
IPO Issue $1.15
125%
Price: $0.89
120%
115%
110%
105%
100%
FLT FTSE ST All-Share REIT Index
95%
21 Jun 16 11 Nov 16 05 Apr 17 30 Aug 17 23 Jan 18 13 Jun 18 05 Nov 18 28 Mar 19
Stock Information (As at 16 May 2019)
Market capitalisation S$2,331.1 million 6.1%
Free Float ~73%
1-year average daily traded volume ~5.1 million units
2.2% 2.0%
Annualised Distribution Yield(1) 6.1%
Annualised Total Return since IPO(2) 15.8% 0.6%
Distribution Payment Semi-annual FLT 10-yr Singapore
(3)
5-yr Singapore
(3)
12-month S$
(3)
Annualised Yield Government Bond Government Bond Fixed Deposit
1. Based on FLT’s closing price of A$1.15 per unit as at 16 May 2019 and by annualising FLT’s interim distribution of 3.54 Singapore cents for the period from 1 October 2018 to 31 March 2019
2.
3.
Source: Bloomberg LLP (For the period from 21 June 2018 to 16 May 2019). Calculation of total return assumed the distributions paid during the period are reinvested
Source: Monetary Authority of Singapore Daily SGS Prices and interest rates of banks and finance companies (Last accessed on 16 May 2019)
8
Portfolio and Asset
Management
Nick Scali & Plastic BottlesMazda
Facility, New South
Facility, Wales,Australia
Victoria, Australia
Portfolio Overview Australia
Prime and modern properties with an average
age of 7.6 years properties concentrated within
major logistics and industrial markets
Focused on the
eastern seaboard
60 Melbourne (Victoria)
Properties
GLA
Valuation(1)
29
632,504 sq m
A$780.9m
Sydney (NSW)
Properties
GLA
Valuation(1)
15(3)
364,268 sq m
A$583.2m
Properties % of Portfolio(1) 39.2% % of Portfolio(1) 29.3%
Brisbane (12)
Perth (1)
Sydney (15)
Adelaide (3)
Brisbane (Queensland) Adelaide (South Australia) Perth (Western Australia)
Melbourne (29)
Properties 12 Properties 3 Properties 1
GLA 268,597 sq m GLA 26,413 sq m GLA 20,143 sq m
Valuation(1) A$586.4m Valuation(1) A$27.3m Valuation(1) A$15.6m
% of Portfolio(1) 29.4% % of Portfolio(1) 1.3% % of Portfolio(1) 0.8%
As at 31 March 2019
A$2.0 billion 1,311,924 sq m 99.4% 6.43 years 3.1% p.a.
Average Fixed
Portfolio Value(1) Portfolio GLA Occupancy WALE(3)
Rental Increases
1. Based on the appraised value of FLT’s Australian portfolio as at 30 September 2018
2. 14 properties located in Sydney, 1 property located in Wollongong
3. Based on GRI, being the contracted rental income and estimated recoverable outgoings for the month of March 2019. Excludes straight lining rental adjustments 10Portfolio Overview Melbourne
FLT’s properties in Melbourne are primarily located in the west and south east industrial precincts and service
Melbourne’s port and large south eastern residential population base
No. of
Sub-market Location Precinct Characteristic
Properties
A 5 • Access to M1 (Monash Freeway) and M3
(EastLink)
South East B 8
• Services the large south eastern residential
C 2 population base
• Access to key freeways, including the
Tullamarine Freeway, Citylink Tollway, and
North D 6 Western Ring Road, together with the
Tullamarine Airport.
• Sydney is accessed via the Hume Highway
• Close to the shipping port and access to
West E 6 the M1, Geelong Road, M80 Western Ring
Road
F 1 • Access to the M1 (Westgate Freeway)
City Fringe
G 1 linking it to the west precinct
Total 29
A South Park Industrial Estate E West Park Industrial Estate
B The Key Industrial Park F Altona Industrial Park
C Clayton South & Mulgrave G Port Melbourne
D Melbourne Airport Business Park
11Portfolio Overview Sydney
FLT’s properties in Sydney are well-connected to major freeways, Sydney’s port and are able to service growing
population in the north west
No. of
Sub-market Location Precinct Characteristic
Properties
A 4 • Excellent access to key motorways,
including M7, M4 and other main
B 2
arterial roads
Outer Central
West • Third-party logistics (“3PL”), retail
and wholesale distribution centres for
C 3
key brand name operators are
located in this precinct
D 4 • Close to M2 and M7 and access to
the large and growing north west
Outer North population corridor
West E 1 • Supply is moderately constrained –
sites suit smaller development
• One of the three major trade ports
Port Kembla within New South Wales and is
N.A. 1
(Wollongong) situated within the southern industrial
city of Wollongong
Total 15
A Eastern Creek D Seven Hills
B Pemulwuy E Winston Hills
C Wetherill Park
12Portfolio Overview Brisbane
FLT’s properties in Brisbane are primarily concentrated in the southern sub-market, which has good road
linkages to the north, west and south to the Gold Coast residential population bases
No. of
Sub-market Location Precinct Characteristic
Properties
A 1
B 1
K
C 1
D 1
• Largest geographical industrial precinct that
J Southern E 1 has good road linkages to the north, west and
south to the Gold Coast residential population
F 1
F G 1
H 2
A
B I 1
G
C • Close to key infrastructure, including Port of
D Brisbane and the Brisbane Airport
I
• Access north and south via the M1
E Trade Coast J 1
H • Supply is constrained. Alternative use is
strong competition for development in
neighbouring suburbs
A Flint Street E Platinum Street I Wayne Goss Road
• Services the population to the North of
B Boundary Road F Shettleston Street J Queensport Road Brisbane via the Gympie Road, Bruce
Northern K 1 Highway and Houghton Highway
C Siltstone Place G Sandstone Place K Earnshaw Road
• Limited availability of development land
D Stradbroke Street H Pearson Road
Total 12
13Portfolio Overview Germany and the Netherlands
22 prime and predominantly
freehold industrial properties
located in key global logistics hubs
Hamburg-Bremen
Cluster Leipzig-Chemnitz Munich-Nuremberg Stuttgart-Mannheim Dusseldorf-Cologne
Properties 2 Properties 4 Properties 5 Properties 4
GLA 29,590 sq m GLA 140,711 sq m GLA 156,663 sq m GLA 75,100 sq m
Valuation(1) €30.2m Valuation(1) €135.8m Valuation(1) €186.8m Valuation(1) €67.7m
Utrecht-Zeewolde % of Portfolio(1) 4.8% % of Portfolio(1) 21.6% % of Portfolio(1) 29.7% % of Portfolio(1) 10.8%
Cluster
Leipzig-Chemnitz
Cluster
Tilburg-Venlo
Cluster Düsseldorf-Cologne
Cluster
German Properties
Dutch Properties
Tilburg-Venlo Utrecht-Zeewolde Meppel Hamburg-Bremen
Logistics Hubs
Properties 2 Properties 2 Properties 1 Properties 2
GLA 50,763 sq m GLA 136,509 sq m GLA 31,013 sq m GLA 32,170 sq m
Major Logistic Clusters Munich-Nuremberg
Valuation(1) €41.0m Valuation(1) €105.9m Valuation(1) €25.4m Valuation(1) €36.2m
Cluster
% of Portfolio(1) 6.5% % of Portfolio(1) 16.8% % of Portfolio(1) 4.0% % of Portfolio(1) 5.8%
Stuttgart-Mannheim
Cluster
As at 31 March 2019
89% leases
€$629.1 million 652,519 sq m 100% 7.08 years with CPI-linked
Portfolio Value(1) Portfolio GLA Occupancy WALE(2) indexation or fixed
escalation
1. Based on the appraised value as at 30 September 2018, and includes the property at Mandeveld 12, Meppel, the Netherlands, which was acquired on 31 October 2018
2. Based on GRI, being the contracted rental income and estimated recoverable outgoings for the month of September 2018. Excludes straight lining rental adjustments 14Exposure to the Attractive German and Dutch Logistics
and Industrial Markets
Germany and the Netherlands sit at the crossroads of key global trade routes.
Key global logistics hub — Germany
and the Netherlands ranked No.1 and No.6
Located in heart of Europe with
extensive road, motorway and
Further extension of global
reach given critical role in
logistics hubs globally(1) rail network China’s Belt and Road Initiative
Europe’s Main Trade Arteries Traverse Germany and China’s Belt and Road Initiative
the Netherlands
Industrial Corridor
of Europe Copenhagen
Riga The Netherlands
Hamburg
Hannover Berlin Hamburg
London Brussels
Ruhr Leipzig Rotterdam
Frankfurt Warsaw
Harbin
Paris Stuttgart Prague
Vienna
Xi’An Beijing
Lanzhou Zhengzhou
Lyon Zurich Munich Germany
Budapest China Chongqing
Yiwu
Milan
Kunming Changsha
Madrid
Barcelona
Rome
Over 62% of the World’s Population
Over 34% of the World’s Merchandise Trade
Over 31% of the World’s Gross Domestic Product (“GDP”)
Established Economic Cores Established Economic Routes Silk Road Maritime Silk Road Railroad
European Emerging Markets Eastern European Emerging Routes Economic Belt of the 21st Century Connections
Germany and the Netherlands are expected to benefit directly from China’s Belt and Road Initiative given their trade-oriented economies
Source: Independent Market Research Report
1. Based on World Bank 2018 LPI Global Ranking
15Prime, Modern Logistics and Industrial Properties with
High Specifications
Modern portfolio with average age of
7.82 years(1) Strong location within key logistics and industrial hubs / centers
with strong connectivity to key infrastructure
< 2 Years,
9.2%
> 10 Years,
35.6%
Modern logistics and industrial properties with high
specification installations including solar PV systems,
Portfolio hardstand, LED lighting, in-rack, sprinkler systems, crane
2 - 5 Years,
Age by 31.1% installation and ventilation plants
GLA(1)
5 - 10 Years,
24.1%
Portfolio comprises predominantly freehold
land and long leasehold land tenure
Ziegler Facility Leadec Facility Martin Brower Facility
Other Leasehold,
8.2%
Freehold, 70.5%
Land
Tenure by
Value(1)
> 80 Year
Leasehold, 21.2%
Volkswagen Facility Constellium Facility CEVA Facility
1. As at 31 March 2019
2. Based on the appraised value of FLT’s portfolio as at 30 September 2018. Based on an exchange rate of €1:A$1.5905 for the properties in Germany and the Netherlands 16Well-Diversified and High Quality Tenant Base
High quality, diversified tenant base underpinned by primary industries including consumer,
logistics services, manufacturing and automotives.
Others Top 10 Tenants(1)
Automotives 1.3%
12.0% WALE
Consumer • No single tenant
33.6%
Tenant % of GRI (Years)
contributing more
Manufacturing Breakdown than 10% of GRI Coles 7.0 13.2
15.1%
of Tenants • Top 10 tenants BMW 3.6 6.7
by Trade(1) represent CEVA Logistics 3.6 6.1
approximately
Logistics Schenker 3.2 5.5
37.9%
32.0% of total GRI
Mainfreight 2.9 6.9
Constellium 2.5 8.3
Consumer Sector Tenants Logistics Sector Tenants
Bakker Logistics 2.4 11.6
DSV Solutions 2.3 5.6
Techtronics Industries 2.3 3.3
Inchcape Motors 2.2 3.5
Automotive Sector Tenants High quality tenant base that includes MNCs, ASX-listed
companies and conglomerates with strong lease terms
1. Based on GRI, being the contracted rental income and estimated recoverable outgoings for the month of March 2019. Excludes straight lining rental adjustments 17Proactive Asset Management
Well spread-out lease expiry profile(1)
46,078 sq m Only one lease expiry remaining for No concentration of lease
of leasing completed in FY2019, representing just 1.3% of expiry, providing long-term cash
1HFY19 portfolio GRI flow stability
30.2%
As at Mar-2019
23.7%
As at Mar-2018
17.3%
16.0%
11.4%
10.2% 9.9% 9.6%
8.5% 8.5% 8.6%
7.4%
5.9% 6.2%
5.2% 4.9% 4.8% 4.2% 3.9%
1.3%
0.4% 0.6%
Vacant Sep 2019 Sep 2020 Sep 2021 Sep 2022 Sep 2023 Sep 2024 Sep 2025 Sep 2026 Sep 2027 Sep 2028 and
beyond
1. Based on GRI, being the contracted rental income and estimated recoverable outgoings for the month of March 2019. Excludes straight lining rental adjustments 18Proactive Asset Management
Value creation through selective asset enhancement initiatives (“AEI”)
• 1,219 sq m warehouse expansion with installation of a 773 sq m awning
• Building upgrades and sustainability initiatives including a 125 kilowatt hour (“kWh”)
solar photovoltaic (“PV”) system
• Return on AEI: Approximately 10%
• Accompanied by 12-year lease extension by the tenant to November 2031
• Completed in December 2017
57-71 Platinum Street, Creastmead, QLD, Australia
• 22,355 sq m warehouse expansion
• 5,489 sq m of the expanded space leased to Johnson Outdoors for a 10-year lease
term expiring 30 June 2028
• Additional 5,676 sq m and 11,190 sq m respectively taken up by existing tenants
Roman and Hellmann
• Completed in June 2018
Keperstraße 10, Nuremberg, Germany
• Expansion to existing hardstand area and an upgrade of existing facilities, including
an office refurbishment(1)
• Sustainability Upgrades: LED lighting replacements as well as the installation of a
250 kWh solar PV system
• Expected return on AEI: Approximately 8.0%
• 10-year lease extension by CHEP Australia to August 2031
468 Boundary Road, Derrimut, Victoria, Australia • Completion expected by July 2019
1. Includes a A$0.8 million (exclusive of GST) acquisition of an adjacent 12,320 sq m freehold site (59A Foxley Court, Derrimut) from Frasers Property Australia 19Commitment To Environment Sustainability
FLT’s commitment to environmental sustainability has been recognised by both GRESB(1) and
GBCA(2)
GRESB Assessment(1) FLT’s Green Star-rated Status(2,3)
In 2017, FLT's first year of participation in the GRESB assessment, the Performance rated
company was awarded Regional Sector Leader (Australia / New Zealand), 61.4%
with a score of 80 Highest Green Star performance-
Subsequently in 2018, the company was ranked 1 st globally with an rated portfolio in Australia
improved score of 91
Achieved an overall 4 Star Green Star
Design rating as assessed by the GBCA
Review
1st in Australia / 5.4% First to achieve 6 Star Green Star
1st Global 1st Global New Zealand
ratings for industrial facilities in each
------------- ------------- -------------
Industrial (Listed) Health and Industrial Not rated of New South Wales, Victoria
Wellbeing 33.2% and Queensland
(Industrial)
Potential Sustainability Benefits Sustainability Initiatives
Surface level
Reduces ongoing occupancy costs
✓
Building and
internal works geoair heat pump
✓
Attracting new tenants, especially those using sustainability
as a criteria Underground
geoair loops
✓
Assists in retaining tenants at lease expiry
166 Pearson Road, 1 Burilda Close, Integrated in the base design of two properties in NSW (17
Decreases building obsolescence
✓
Yatala, QLD Wetherill Park, NSW
Kangaroo Avenue, Eastern Creek and 2 Burilda Close,
Wetherill Park)
✓
Minimises vacancy downtime Energy-efficient Solar PV Geothermal heating
LED lighting systems and cooling
1. Refers to the 2018 Real Estate Assessment by Global Real Estate Sustainability Benchmark (GRESB), the global ESG benchmark for real estate
2. Green Star ratings are awarded by the Green Building Council of Australia (GBCA) which has assessed the Australian properties against nine key performance criteria – energy, water, transport, materials, indoor environment quality
management, land use & ecology, emissions and innovation
3. As at 31 December 2018
20Key Markets Overview
Nick Scali &Dachser
Plastic Bottles
and DSVFacility,
Mazda New Vaihingen,
Facility, South
Facility, Wales,Germany
Victoria, Australia
AustraliaAustralia – Economic Snapshot
GDP Annual Growth Rates (%)
Key Economic Indicators
4.0
3.5
GDP Growth: 2.3% for the 12-month ended Dec 3.0
2018, lower than the preceding 12-month period, 2.5
with the slower growth due largely to softening in 2.0
the construction and residential sectors. Public 1.5
infrastructure investment continues to support the 1.0
0.5
economy
0.0
Low Unemployment rate: 5.2% in April 2019. 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 4Q2018
Wage growth in the 12 months to Nov 2018 was
2.4% and is expected to pick up gradually as the
labour market strengthens
Official Cash Rate (%)
Australian Dollar: In recent months, the Australian
dollar has come under pressure, possibly arising 5.0
from continued financial market volatility and global 4.0
trade tensions
3.0
Official Interest Rates: Cash rate maintained at
1.5% 2.0
Australian government 10-year bond yields: 1.0
1.71% as of 9 May 2019
0.0
2011 2012 2013 2014 2015 2016 2017 2018
Sources: Australian Bureau of Statistics; Reserve Bank of Australia – Capital Market Yields – Government Bonds – Daily (Last Accessed on 16 May 2019), https://www.quandl.com/data/RBA/F02-Capital-
Market-Yields-Government-Bonds-Daily
22Australia – Population Growth and Infrastructure
Over the medium to long term, the Australian Population Growth(2)
three major Australian cities of
Sydney, Melbourne and Brisbane 500,000
are expected to remain in the top
450,000
10 fastest growing major cities in
the developed world 400,000
This means that demand for
logistics space will continue to 350,000
grow in Australia, particularly as 300,000
Australians become more
accustomed to ecommerce as a way 250,000
to shop for goods
200,000
Governments across the nation
have now accepted that population 150,000
and freight growth need to be
100,000
catered for, and Australia now has
A$260 billion worth of major 50,000
transport infrastructure projects
under construction or planned 0
across 315 projects, up from
A$211 billion across 260 projects
only three years ago(1) Natural Increase Net Overseas Migration
1. Capital Markets Australia & New Zealand Investment Review, Year in Review and Outlook 2019 - Industrial, Colliers International
2. Australian Bureau of Statistics. Annual figures are for the period from October to September 23Australian Industrial Market
National take-up levels have been robust with a total of approximately 2.5 million sq m leased over the preceding
12 months to March 2019 (15% above the 10-year average), underpinned by an upswing in demand from retail, food
and logistics occupiers
Australian industrial supply is approximately 1.2 million sq m over the previous year to March 2019. There has
been increasing speculative developments in Melbourne and Sydney which reflects confidence in the leasing market
As national take-up levels have consistently exceeded new completions, vacancy levels are at 5 year lows across
the three eastern seaboard cities of Sydney, Melbourne and Brisbane
Land values have appreciated considerably on the back of the demand-led expansion in development activity amid
a shortage of developable land
Investor demand for industrial space has continued to accelerate with further yield compression compared to the
first quarter of 2018 (“1Q18”)
Rental growth is expected to remain positive as a result of increasing land values, strong projected population
growth and the e-commerce boom
sq m ('000s) Australian Total Industrial Supply
2,400
2,000
1,600
1,200
800
400
0
Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Annualised as at Q1 2019 Completed 10 year annual average
Sources: JLL Real Estate Intelligence Service – Industrial Market Snapshot 1Q 2019; Jones Lang LaSalle Real Estate Data Solution – Industrial Occupier Moves from 1Q09 to 1Q19; Knight Frank Research – Australian Capital 24
View Outlook 2019Sydney Industrial Market
Supply: Supply levels have continued to significantly eclipse the long term average with 654,000 sq m new space
added to the market over the last 12 months, which accounted for more than half of new completions in Australia.
Robust construction activity is underpinned by significant public infrastructure spending. The forward pipeline remains
solid over 2019 however, a constrained supply of serviced land is likely to limit the amount of development activity
Demand: Annual take-up levels were recorded at 763,000 sq m which continued to surpass new completions. The
strong demand for industrial space has spurred increasing speculative developments (predominantly in Outer West
precincts) with most new space taken up prior to completion. The strong leasing market has been buoyed by consumer
demand combined with growth in last mile logistics
Rents: The y-o-y rental growth was 3.5% across all precincts and prime rents in the Outer Central West precinct
increased by 4.3% to currently sit at A$122/sq m. The rental uplift is expected to remain strong as tenants are willing to
pay a premium to secure new developments of higher quality and specification compared to the existing stock
Vacancy: The level of available space remains well below historical average
SQ M ('000s) Sydney Industrial Total Supply
800 Sydney Industrial Prime Grade Net Face Rents
Prime grade net fact rent $psm p.a.
700 145
$140
600 $135
500
135
$129
$124
400 125 $121 $122
$119
300 $114
$112
200 115 $111 $109
100
105
0
Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
95
Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1
Completed 10 year annual average
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Annualised as at Q1 2019
Sources: Jones Lang LaSalle Real Estate Intelligence Service – Sydney Industrial Final Data 1Q19; Jones Lang LaSalle Real Estate Intelligence Service – Sydney Industrial Snapshot 1Q19; Jones Lang LaSalle Real Estate Data
Solution – Sydney Construction Projects from Q1 2009 to 1Q2019; Knight Frank Research – Sydney Industrial Market Overview February 2019 25Melbourne Industrial Market
Supply: Supply levels in Melbourne are below the 10-year average with only 20,200 sq m space completed over the
first quarter of 2019 (“1Q19”). Large developers are activating their land banks, most notably in the West, to satisfy
tenant demand for consolidating from a number of sites into a larger, more affordable accommodation. New supply in
2019 is expected to be constrained by the lack of development-ready sites (especially in the South East)
Demand: Take-up levels were robust with 200,500 sq m space leased over 1Q19, predominantly driven by pre-
commitments in the West and South East. Third party logistics providers (“3PL”) have boosted demand for industrial
space as consumer preferences shift towards online shopping. The food industry, supported by strong population
growth in Victoria, is also driving occupier demand for larger, more automated warehouses (e.g. Coles and Woolworths)
Rents: As strong demand has outpaced supply, prime face rents have recorded a steady y-o-y growth of 2.2% across
all precincts (except for City Fringe, which was stable)
Vacancy: Net absorption of industrial space remains positive. According to Knight Frank, vacancy in Melbourne is at its
lowest level in 5 years with approximately 671,500 sq m of available space
SQ M ('000s) Melbourne Industrial Total Supply Melbourne Industrial Prime Grade Net Face Rents
Prime grade net fact rent $psm p.a.
800
700 $94
95 $92
600
$90
$89 $89
500 90 $88
$87
400 $86
$84 $84
300 85 $83
200
100 80
0
Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 75
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Completed 10 year annual average
Annualised as at Q1 2019
Sources: Jones Lang LaSalle Real Estate Intelligence Service – Melbourne Industrial Final Data 1Q19; Jones Lang LaSalle Real Estate Intelligence Service – Melbourne Industrial Snapshot 1Q19; Jones Lang LaSalle Real Estate Data
Solution – Melbourne Construction Projects from 1Q09 to 1Q19; Knight Frank Research – Melbourne Industrial Market Overview February 2019 26Brisbane Industrial Market
Supply: New developments in Brisbane remained subdued with only 48,200 sq m completed in 1Q19, 20% below the
long-term average. This trend is expected to continue over the near term
Demand: Net absorption of industrial space has been positive with annual take-up totalling 575,400 sq m (26% above
the long-term average), predominantly influenced by logistics operators as omni-channel retailing becomes entrenched
in the supply chain. Occupier demand is expected to further strengthen over 2019, supported by improving
merchandise exports and population growth in Queensland
Rents: The Brisbane industrial market is recovering with prime rents returning to pre-2017 levels. The falling vacancy
and increasing land price have begun to translate into rental growth in the Northern and Southern precincts
Vacancy: The improved occupier demand together with modest new stock being added to the market has resulted in
vacancy at below-average levels for the first time over the past five years
SQ M ('000s) Brisbane Industrial Total Supply Brisbane Industrial Prime Grade Net Face Rents
600
Prime grade net fact rent $psm p.a.
130
500
$120 $120
$118 $118 $118
120 $116 $117
400 $114 $115
$112
$110
300 110
200
100
100
90
0 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1
Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Completed 10 year annual average
Annualised as at Q1 2019
Sources: Jones Lang LaSalle Real Estate Intelligence Service – Brisbane Industrial Final Data 1Q19; Jones Lang LaSalle Real Estate Intelligence Service – Brisbane Industrial Snapshot 1Q19; Jones Lang LaSalle Real Estate Data
Solution – Brisbane Construction Projects from 1Q09 to 1Q19; Knight Frank Research – Brisbane Industrial Market Overview March 2019 27Economic Snapshot – Europe
German GDP Annual Growth Rates (%)
Germany
3.0
The German economy grew 1.5% for 2018, compared to 2.5% 2.5
a year ago 2.0
Solid domestic fundamentals, supported by a low 1.5
unemployment rate of 3.1% in February 2019 provides 1.0
support even as ongoing US-China trade tensions and Brexit 0.5
continue to have an impact on economic growth 0.0
1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 4Q2018
The Netherlands
Dutch GDP Annual Growth Rates (%)
The Dutch economy grew 2.7% year-on-year in 2018, with
positive contributions from household consumption, capital 4.0
investments as well as a strong labour market. 3.0
Unemployment rate in the Netherlands on a seasonally
2.0
adjusted basis decreased to 3.3% in March 2019, from 3.6%
in December 2018 1.0
0.0
1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 4Q2018
EURIBOR
EURIBOR remained in the negative range as at 31 March (%) EURIBOR
2019 0.0
-0.1
-0.1
-0.2
-0.2
-0.3
-0.3
-0.4
-0.4
Dec-15 Apr-16 Aug-16 Dec-16 Apr-17 Aug-17 Dec-17 Apr-18 Aug-18 Dec-18
Source: Destatisches Bundesamt (Federal Statistics Office of Germany), CBS (Statistics Netherlands), Bloomberg, Reuters, Economist Intelligence Unit
28Industrial Markets Overview Germany and the Netherlands
Germany
Take-up and Prime Rent (for warehouse >5,000 sq m) Take-up : -22% (Q1 2019 vs Q1 2018)
000 sq m Q1 Q2-Q4 Prime rent €/sq m/yr
Take-up in Germany remained high at 1.2 million sq m
7,500 86 86 100
78 81 81 82 New supply for the rental market remains limited with users
6,000 80 contining to seek build-to-suit solutions
4,500
5,150
60 Investment activity dipped significantly in Q1 mainly due to a
4,800 4,240 lack of available logistics products in the major logistics hubs
3,000 4,270 40
3,550
Following a strong compression since 2016, average yields
1,500 20
have stabilised at 4.1% in the major distribution hubs
930 1,280 1,280 1,540 1,200
890
0 0
2014 2015 2016 2017 2018 2019
The Netherlands
Take-up and Prime Rent (for warehouse >5,000 sq m) Take-up : +31% (Q1 2019 vs Q1 2018)
000 sq m Q1 Q2-Q4 Prime rent €/sq m/yr Business confidence has been boosted by domestic demand and
industrial output over the past two years
3,000 100
85 82 83
75
80 All major occupier markets have recorded strong volumes of
2,500 80 transactions in Q1, with Venlo confirming its strong market position
2,000
60 Following two outstanding years, industrial and logistics investment
2,280
1,500 1,530 has unsurprisingly slowed in Q1 2019
40
1,000 Yields stabilised at 4.5% in Venlo, while prime rents have largely
1,360
690 20 remained unchanged from the preceding quarter
500 660 690 550 720
210 330
0 90 0
2014 2015 2016 2017 2018 2019
Source: BNP Paribas Real Estate International Research
29Strategy and
Conclusion
StanleyCarpets
Beaulieu Black & Facility,
Decker Facility, Victoria,Australia
Queensland, AustraliaFLT’s four-pronged strategy to drive sustainable growth
and distribution
Principal Objectives Strategies to support the Principal Objectives
1
Proactive leasing: Maintain high occupancy
Active Asset rate, long WALE and well-diversified tenant base
Management Asset Enhancement: Assess and undertake
AEIs on the FLT portfolio to unlock further value
Deliver stable
Achieve long- and regular 2 Undertake development activities of properties
term growth in distributions complementary to the FLT portfolio
DPU to unitholders – Development activities can be up to 10% of
Selective
Development the current AUM(1) as per MAS guidelines
Re-development of existing assets
Sponsor’s development pipeline
3
Invest globally in Pursue strategic acquisition opportunities of
logistics and Acquisition quality industrial properties
industrial assets Growth – ROFR over 47 properties from FLT’s Sponsor
– Third-party acquisitions
4
Capital & Risk Optimise capital mix and prudent capital
Management management
1. Regulatory limit of not more than 10% of the company’s Deposited Property (subject to maximum of 25% only if additional 15% allowance is utilised solely for redevelopment of an existing property that has been held for 3 years and continue
to be held for 3 years after completion and obtains specific approval of unitholders) 31Summary
FLT’s portfolio of 82 properties in Australia, Germany and the Netherlands provide positive
exposure to modern and developed logistics and industrial markets
1 Prime, Modern and High Quality Portfolio
2 High occupancy rate with well-diversified tenant base
3 Predominantly freehold and long leasehold land tenure
4 Long WALE, with no concentration of lease expiry
5 Strong & Established Sponsor – Frasers Property Limited
32Additional Info:
1HFY2019 Financial
Review
Rheinberg Facility, Rheinberg, GermanyFinancial Performance 1 October 2018 – 31 March 2019
(A$’000) 1HFY19 1HFY18 Change (%) Remarks
Revenue 119,190 86,005 38.6 • Contributions from the FY2018 European Acquisition, FY2018 Australian
Acquisition and the FY2019 Dutch Acquisition(2); and
• A$1.2 million early surrender fee received for Lot 63 - 79 South Park Drive,
Adjusted net Dandenong South, Victoria
96,796 66,805 44.9
property income(1) which was partially offset by:
• The effect of the FY2018 Divestments(2)
• Higher borrowings drawn to finance the various acquisitions in FY2018 and
FY2019 and after taking in the proceeds from the FY2018 Divestments. The
Finance costs (14,751) (9,653) 52.8 weighted average Interest rate excluding upfront related expenses was 2.4%
per annum compared to 2.9% per annum for the corresponding period.
• Contributions from the various acquisitions;
Distributable which was partially offset by:
income to 73,607 51,720 42.3 • Higher finance costs;
• 91.6% of management fees paid in the form of units (1HFY18: 72.8%); and
Unitholders
• Higher current income tax arising from higher distributable income
DPU
3.63 3.40 6.8
(Australian cents)
• Lower hedged exchange rate of A$1.00: S$0.9743(3) (1HFY18: A$1.00:
S$1.0615) due to weaker AUD and EUR against the SGD
• 1HFY19 hedged exchange rate has decreased by 8.2% as compared to
1HFY18
DPU
3.54 3.61 (1.9)
(Singapore cents)
1. Net property income excluding straight lining adjustments for rental income and after adding back straight lining adjustments for ground leases
2. Please refer to Page 2 of FLT’s Financial Statements Announcement dated 26 April 2019 for details of the capitalised terms
3. A 100 bps increase in the AUD:SGD and EUR:SGD exchange rates relative to their respective distributable income contribution will result in an increase of 0.03 Singapore cents in DPU
34Distribution
FLT manages foreign exchange volatility on its distributable income with hedging instruments and targets to hedge distributions
on a rolling six-month basis
The lower DPU of 3.54 Singapore cents by 1.9% as compared to 3.61 Singapore cents for 1HFY18, and lower DPU of 1.76
Singapore cents by 2.8% as compared to 1.81 Singapore cents for 2QFY18 was due mainly to:
– Lower hedged exchange rate of 8.2% for 1HFY19 vs 1HFY18, and 9.2% for 2QFY19 vs 2QFY18
FLT has paid out 100% of distributable income since IPO
Distribution per Unit
1HFY19 1HFY18
2QFY19 2QFY18
3.63 3.54 3.61
3.40
1.82 1.76 1.81
1.70
Australian Cents Singapore Cents Australian Cents Singapore Cents
35Balance Sheet
The value of investment properties increased 0.8% from A$2,978 million as at 30 September 2018 to A$3,003 million as at
31 March 2019, due mainly to:
– Completion of acquisition of the freehold interest in a prime logistics property in the Netherlands on 31 October 2018. The
agreed purchase price for the property was €25.36 million (approximately A$40.56 million);
– Purchase of freehold land adjacent to the CHEP Property for A$0.8 million;
which was partially offset by
– Classification of A$15.3 million for the property at 63-79 South Park Drive, Dandenong South, Victoria, Australia to
“Investment Property held for sale” (included within Current assets)
FLT is in a net current liability position as at 31 March 2019. Included in current liabilities is short-term borrowings of A$170 million
term loan due in June 2019. The REIT Manager has agreed the refinancing terms for a five-year term loan with its panel of banks
and is in an advanced stage of documentation for the facility agreement
Balance Sheet (A$’000) As at 31 Mar 19 As at 30 Sep 18
Investment properties 3,002,650 2,978,204
Other non-current assets - 1,133
Current assets 128,364 115,638
Total assets 3,131,014 3,094,975
Non-current liabilities 906,313 884,774
Current liabilities 270,511 266,947
Total liabilities 1,176,824 1,151,721
(1) (2)
Net asset value per Unit (A$) 0.95 0.95
Net asset value per Unit (S$) 0.91 0.94
1. Based on an exchange rate of A$1.00:S$0.9602 as at 31 March 2019
2. Based on an exchange rate of A$1.00:S$0.9878 as at 30 September 2018 36Debt
As at 31 March 2019
Aggregate Leverage 35.1%
Total Gross Borrowings A$1,097 million
Weighted Average Cost of Borrowings(1) 2.4%
Average Weighted Debt Maturity 2.4 years
Interest Rate Exposure Fixed 79%
Interest Coverage Ratio 7.5 times
Debt Headroom A$563 million(2)
Debt Maturity Profile
A$ Debt (A$'M) € Debt (A$'M)
216 Terms for the five-year A$
term loan have been finalised
and are in an advanced stage
of documentation 140
9 86
170 236
160 12 170
18 50
FY2019 FY2020 FY2021 FY2022 FY2023 >FY2024
1. Excluding upfront debt related expenses
2. Prior to reaching the 45.0% aggregate regulatory leverage limit 37Capital Management
Investment Properties(1) and Debt (As at 31 March 2019)
3,018
Value (A$ million)
Debt (A$ million)
2,017
1,097 1,001
616 481
Total Portfolio Australian Portfolio European Portfolio
Interest Risk Management (As at 31 March 2019)
Fixed,
79%
Variable debt % of total debt
Variable, AUD 9%
21%
EURO 12%
1. Includes Investment Property held for sale
38Frasers Logistics & Industrial Asset Management Pte. Ltd. 438 Alexandra Road | #21-00 | Alexandra Point | Singapore 119958 Tel: +65 6813 0588 | Fax: +65 6813 0578 | Email: ir@fraserslogisticstrust.com www.fraserslogisticstrust.com
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