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Frasers Logistics & Industrial TrustInvestor Presentation
May 2019
FrieslandCampina Facility, Meppel, the NetherlandsOtto-Hahn Straße, Vaihingen, GermanyCHEP Facility , Victoria, AustraliaDSV Facility, Venlo, The Netherlands
FLT Overview
Portfolio and Asset Management
Key Markets Overview
Strategy and Conclusion
Additional Info: 1HFY19 Financial Overview
2
Contents
FLT Overview
Clifford Hallam Facility, Victoria, AustraliaLGI Facility, Freiberg, Germany
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,
Germany and the Netherlands
4
Introduction to FLT
82
properties
A High Quality
Portfolio
Focused on
Major Developed
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
A$3.0 billionPortfolio Value(1)
99.6%Occupancy Rate(2)
1,964,443 sq mGross Lettable Area (“GLA”)
Australia, 66.5%
Germany, 24.3%
The Netherlands, 9.2%
Freehold, 70.2%>80 Years Leasehold,
21.5%
Other Leasehold, 8.3%
Regions(1) Land
Tenure(1)
Key Milestones (IPO to September 2018)
5
Listed on the
SGX-ST on
20 June 2016
(51 Properties) • Property Price:
A$58.2 mm
• GLA: 18,848 sq m
• Occupancy: 100%
• WALE(2): 20.0 years
Acquired 3rd Call
Option(1) Property
1 Burilda Close, Wetherill Park, NSW
June 2016
• Property Price:
A$32.5 mm
• GLA: 21,660 sq m
• Occupancy: 100%
• WALE(2): 15.0 years
111 Indian Drive, Keysborough, VIC
• Property Price:
A$36.7 mm
• GLA: 30,618 sq m
• Occupancy: 100%
• WALE(2): 6.0 years
143 Pearson Road, Yatala, QLD
Acquired Two Call Option(1) Properties
August 2016 November 2016 June – October 2017
• Portfolio Price: A$169.3mm
• GLA: 124,527sqm
• Occupancy: 100%(3)
• WALE(2): 9.6 years
1st Portfolio Acquisition: 7 Properties in Australia
May 2018
• Portfolio Price: €596.8 mm
• GLA: 620,786 sq m
• Occupancy: 100%(4)
• WALE(2): 8.0 years
2nd Portfolio Acquisition:
21 Properties in Germany and the Netherlands
August 2018
Lot 102 Coghlan Road, Outer Harbor, South
Australia
• Sale Consideration: A$8.75 mm
• Book Value: A$6.4 mm
• Premium to Book Value: 36.7%
Divested Two Non-core Properties
80 Hartley Street, Smeaton Grange, New South
Wales, Australia
• Sale Consideration: A$90.5 mm
• Book Value: A$64.5 mm
• Premium to Book Value: 40.3%
September 2018
• Property Price: A$31.1mm
• GLA: 19,487 sq m
• Occupancy: 100%
• WALE(2): 4.2 years
• Property Price: A$31.5 mm
• GLA: 20,078 sq m
• Occupancy: 100%
• WALE(2): 7.0 years
Acquired Two New Australian Properties
103-131 Wayne Goss Drive, QLD
Private Placement
• Private placement of 78 mm new units in FLT at an issue price of
S$1.01 per Unit.
• The new issuance was 4.62 times subscribed
• Launch of equity fund raising to raise S$476 mm by way of:
– Private placement (3.9 times subscribed)
– Preferential offering (1.9 times subscribed)
Equity Fund Raising
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
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)
3 Burilda Close, Wetherill Park, NSW
Key Developments in the Year-to-Date
6
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.
Healthy Leasing Momentum• Completed 46,078 sq m of leasing/renewals in Australia, with reversion of -6.3%
• 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)
• 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)
Strategic Divestments in Australia
63-79 South Park Drive, Dandenong South, Victoria
Acquired a Prime, Freehold Logistics
Property in the Netherlands
on 31 October 2018
• Property Price: €25.36 mm(1)
• GLA: 31,013 sq m
• Occupancy: 100%
• WALE(2): 14.6 years
Mandeveld 12, Meppel, the Netherlands
Included in the FTSE EPRA/NAREIT
Developed Index
since 18 March 2019
• Entry into a leading benchmark index for institutional real-estate investors
• Unit price up approximately 4.6%(3) with higher daily average volume
7
Delivering Stable Distributions
1.85
1.74 1.75 1.75 1.751.70 1.70
1.76 1.781.81 1.821.84
1.74 1.75 1.75 1.771.80 1.81 1.80 1.78 1.78 1.76
20 Jun - 30Sep 2016
1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19
Australian Cents Singapore Cents
Includes DPU of 0.10 Singapore
cents (0.10 Australian cents)
for the period from 20 Jun to
30 Jun 16
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
95%
100%
105%
110%
115%
120%
125%
130%
135%
21 Jun 16 11 Nov 16 05 Apr 17 30 Aug 17 23 Jan 18 13 Jun 18 05 Nov 18 28 Mar 19
FLT FTSE ST All-Share REIT Index
8
Attractive Trading Fundamentals
Stock Information (As at 16 May 2019)
Market capitalisation S$2,331.1 million
Free Float ~73%
1-year average daily traded volume ~5.1 million units
Annualised Distribution Yield(1) 6.1%
Annualised Total Return since IPO(2) 15.8%
Distribution Payment Semi-annual
Trading Performance since IPO (20 June 2016 – 16 May 2019)
SGX Stock Code: BUOU
Bloomberg: FLT:SP
Reuters: FRAE.SI
6.1%
2.2% 2.0%
0.6%
FLTAnnualised Yield
10-yr SingaporeGovernment Bond
5-yr SingaporeGovernment Bond
12-month S$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. 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
3. Source: Monetary Authority of Singapore Daily SGS Prices and interest rates of banks and finance companies (Last accessed on 16 May 2019)
IPO Issue
Price: $0.89
Closing Price
(16 May 2019):
$1.15
FLT units rose by approximately 29.2% for the period from 20 June 2016 to
16 May 2019; outperforming the FTSE ST REIT Index
(3) (3) (3)
Portfolio and Asset
Management
Mazda Facility, Victoria, AustraliaNick Scali & Plastic Bottles Facility, New South Wales, Australia
Portfolio Overview Australia
3.1% p.a.Average Fixed
Rental Increases
1,311,924 sq mPortfolio GLA
Melbourne (Victoria)
Properties 29GLA 632,504 sq m
Valuation(1) A$780.9m
% of Portfolio(1) 39.2%
Adelaide (South Australia)
Properties 3GLA 26,413 sq m
Valuation(1) A$27.3m
% of Portfolio(1) 1.3%
Sydney (NSW)
Properties 15(3)
GLA 364,268 sq m
Valuation(1) A$583.2m
% of Portfolio(1) 29.3%
Perth (Western Australia)
Properties 1GLA 20,143 sq m
Valuation(1) A$15.6m
% of Portfolio(1) 0.8%
Brisbane (Queensland)
Properties 12GLA 268,597 sq m
Valuation(1) A$586.4m
% of Portfolio(1) 29.4%
60Properties
10
99.4%Occupancy
A$2.0 billionPortfolio Value(1)
6.43 yearsWALE(3)
As at 31 March 2019
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
Prime and modern properties with an average
age of 7.6 years properties concentrated within
major logistics and industrial markets
Perth (1)
Adelaide (3)
Melbourne (29)
Sydney (15)
Brisbane (12)
Focused on the
eastern seaboard
11
Portfolio 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
A
B
C
D
E
F
G
South Park Industrial Estate
The Key Industrial Park
Clayton South & Mulgrave
Melbourne Airport Business Park
West Park Industrial Estate
Altona Industrial Park
Port Melbourne
Sub-market LocationNo. of
PropertiesPrecinct Characteristic
South East
A 5 • Access to M1 (Monash Freeway) and M3
(EastLink)
• Services the large south eastern residential
population base
B 8
C 2
North D 6
• Access to key freeways, including the
Tullamarine Freeway, Citylink Tollway, and
Western Ring Road, together with the
Tullamarine Airport.
• Sydney is accessed via the Hume Highway
West E 6
• Close to the shipping port and access to
the M1, Geelong Road, M80 Western Ring
Road
City FringeF 1 • Access to the M1 (Westgate Freeway)
linking it to the west precinctG 1
Total 29
12
Portfolio 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
A
B
C
D
E
Eastern Creek
Pemulwuy
Wetherill Park
Seven Hills
Winston Hills
Sub-market LocationNo. of
PropertiesPrecinct Characteristic
Outer Central
West
A 4 • Excellent access to key motorways,
including M7, M4 and other main
arterial roads
• Third-party logistics (“3PL”), retail
and wholesale distribution centres for
key brand name operators are
located in this precinct
B 2
C 3
Outer North
West
D 4 • Close to M2 and M7 and access to
the large and growing north west
population corridor
• Supply is moderately constrained –
sites suit smaller development
E 1
Port Kembla
(Wollongong)N.A. 1
• One of the three major trade ports
within New South Wales and is
situated within the southern industrial
city of Wollongong
Total 15
Boundary Road Shettleston Street Queensport Road
Siltstone Place Sandstone Place Earnshaw Road
13
Portfolio 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
A
B
C
D
F
G
H
Flint Street
Stradbroke Street Pearson Road
E Platinum Street I
J
Sub-market LocationNo. of
PropertiesPrecinct Characteristic
Southern
A 1
• Largest geographical industrial precinct that
has good road linkages to the north, west and
south to the Gold Coast residential population
B 1
C 1
D 1
E 1
F 1
G 1
H 2
I 1
Trade Coast J 1
• Close to key infrastructure, including Port of
Brisbane and the Brisbane Airport
• Access north and south via the M1
• Supply is constrained. Alternative use is
strong competition for development in
neighbouring suburbs
Northern K 1
• Services the population to the North of
Brisbane via the Gympie Road, Bruce
Highway and Houghton Highway
• Limited availability of development land
Total 12
AB
C
D
E
I
F
G
H
J
K
K
Wayne Goss Road
Portfolio Overview Germany and the Netherlands
89% leases with CPI-linked
indexation or fixed
escalation
652,519 sq mPortfolio GLA
14
100%Occupancy
€$629.1 million
Portfolio Value(1)
7.08 yearsWALE(2)
As at 31 March 2019
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
22 prime and predominantly
freehold industrial properties
located in key global logistics hubs
Munich-Nuremberg
Properties 4GLA 140,711 sq m
Valuation(1) €135.8m
% of Portfolio(1) 21.6%
Utrecht-Zeewolde
Properties 2GLA 136,509 sq m
Valuation(1) €105.9m
% of Portfolio(1) 16.8%
Tilburg-Venlo
Properties 2GLA 50,763 sq m
Valuation(1) €41.0m
% of Portfolio(1) 6.5%
Dusseldorf-Cologne
Properties 4GLA 75,100 sq m
Valuation(1) €67.7m
% of Portfolio(1) 10.8%
Hamburg-Bremen
Properties 2GLA 32,170 sq m
Valuation(1) €36.2m
% of Portfolio(1) 5.8%
Stuttgart-Mannheim
Properties 5GLA 156,663 sq m
Valuation(1) €186.8m
% of Portfolio(1) 29.7%
Tilburg-Venlo
Cluster
Utrecht-Zeewolde
Cluster
Düsseldorf-Cologne
Cluster
Hamburg-Bremen
Cluster
Leipzig-Chemnitz
Cluster
Munich-Nuremberg
Cluster
Stuttgart-Mannheim
Cluster
Major Logistic Clusters
Logistics Hubs
Dutch Properties
German Properties
Leipzig-Chemnitz
Properties 2GLA 29,590 sq m
Valuation(1) €30.2m
% of Portfolio(1) 4.8%
Meppel
Properties 1GLA 31,013 sq m
Valuation(1) €25.4m
% of Portfolio(1) 4.0%
Exposure 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
logistics hubs globally(1)
Located in heart of Europe with
extensive road, motorway and
rail network
Further extension of global
reach given critical role in
China’s Belt and Road Initiative
Europe’s Main Trade Arteries Traverse Germany and
the Netherlands
Industrial Corridor
of Europe
London
Paris
Lyon
Madrid
BarcelonaRome
Milan
Zurich
Brussels
Copenhagen
HamburgHannover
Ruhr
Frankfurt
Stuttgart
Munich Budapest
Vienna
Prague
Leipzig
Berlin
Riga
Warsaw
China’s Belt and Road Initiative
The Netherlands
Hamburg
Rotterdam
Germany ChinaLanzhou
Xi’An
Harbin
Beijing
ZhengzhouChongqingYiwu
ChangshaKunming
Germany and the Netherlands are expected to benefit directly from China’s Belt and Road Initiative given their trade-oriented economies
European Emerging Markets
Established Economic Cores Established Economic Routes
Eastern European Emerging Routes
Maritime Silk Road
of the 21st CenturySilk Road
Economic Belt
Railroad
Connections
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”)
Source: Independent Market Research Report
1. Based on World Bank 2018 LPI Global Ranking
15
Prime, Modern Logistics and Industrial Properties with High Specifications
< 2 Years, 9.2%
2 - 5 Years, 31.1%
5 - 10 Years, 24.1%
> 10 Years, 35.6%
Portfolio
Age by
GLA(1)
Freehold, 70.5%
> 80 Year Leasehold, 21.2%
Other Leasehold, 8.2%
Land
Tenure by
Value(1)
Strong location within key logistics and industrial hubs / centers
with strong connectivity to key infrastructure
Modern logistics and industrial properties with high
specification installations including solar PV systems,
hardstand, LED lighting, in-rack, sprinkler systems, crane
installation and ventilation plants
Modern portfolio with average age of
7.82 years(1)
Portfolio comprises predominantly freehold
land and long leasehold land tenure
Ziegler Facility Leadec Facility
Volkswagen Facility Constellium Facility
Martin Brower Facility
CEVA Facility
161. 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
Well-Diversified and High Quality Tenant Base
High quality, diversified tenant base underpinned by primary industries including consumer,
logistics services, manufacturing and automotives.
Top 10 Tenants(1)
Tenant % of GRI
WALE
(Years)
Coles 7.0 13.2
BMW 3.6 6.7
CEVA Logistics 3.6 6.1
Schenker 3.2 5.5
Mainfreight 2.9 6.9
Constellium 2.5 8.3
Bakker Logistics 2.4 11.6
DSV Solutions 2.3 5.6
Techtronics Industries 2.3 3.3
Inchcape Motors 2.2 3.5
Consumer33.6%
Logistics37.9%
Manufacturing15.1%
Automotives12.0%
Others1.3%
Breakdown
of Tenants
by Trade(1)
• No single tenant
contributing more
than 10% of GRI
• Top 10 tenants
represent
approximately
32.0% of total GRI
Automotive Sector Tenants
Consumer Sector Tenants Logistics Sector Tenants
1. Based on GRI, being the contracted rental income and estimated recoverable outgoings for the month of March 2019. Excludes straight lining rental adjustments
High quality tenant base that includes MNCs, ASX-listed
companies and conglomerates with strong lease terms
17
0.4%1.3%
5.9%
7.4%
17.3%
8.5% 8.5%
4.9%
11.4%
4.2%
30.2%
0.6%
10.2%
5.2%
9.9%
16.0%
6.2%
8.6%
4.8%
9.6%
3.9%
23.7%
Vacant Sep 2019 Sep 2020 Sep 2021 Sep 2022 Sep 2023 Sep 2024 Sep 2025 Sep 2026 Sep 2027 Sep 2028 andbeyond
As at Mar-2019
As at Mar-2018
Proactive Asset Management
1. Based on GRI, being the contracted rental income and estimated recoverable outgoings for the month of March 2019. Excludes straight lining rental adjustments
Well spread-out lease expiry profile(1)
Only one lease expiry remaining for
FY2019, representing just 1.3% of
portfolio GRI
46,078 sq m
of leasing completed in
1HFY19
No concentration of lease
expiry, providing long-term cash
flow stability
18
Proactive Asset Management
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 19
Value creation through selective asset enhancement initiatives (“AEI”)
57-71 Platinum Street, Creastmead, QLD, Australia
Keperstraße 10, Nuremberg, Germany
468 Boundary Road, Derrimut, Victoria, Australia
• 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
• 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
• 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
• Completion expected by July 2019
Commitment 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)
Sustainability Initiatives
✓ Reduces ongoing occupancy costs
✓ Attracting new tenants, especially those using sustainability
as a criteria
✓ Assists in retaining tenants at lease expiry
✓ Decreases building obsolescence
✓ Minimises vacancy downtime
Potential Sustainability Benefits
Energy-efficient
LED lighting
166 Pearson Road,
Yatala, QLD
Solar PV
systems
1 Burilda Close,
Wetherill Park, NSW
Geothermal heating
and cooling
Surface level
geoair heat pumpBuilding and
internal works
Underground
geoair loops
Performance rated61.4%
Design Review5.4%
Not rated33.2%
Highest Green Star performance-
rated portfolio in Australia
Achieved an overall 4 Star Green Star
rating as assessed by the GBCA
First to achieve 6 Star Green Star
ratings for industrial facilities in each
of New South Wales, Victoria
and Queensland
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
1st Global
-------------Industrial (Listed)
1st Global
-------------Health and
Wellbeing
(Industrial)
1st in Australia /
New Zealand
-------------Industrial
In 2017, FLT's first year of participation in the GRESB assessment, the
company was awarded Regional Sector Leader (Australia / New Zealand),
with a score of 80
Subsequently in 2018, the company was ranked 1st globally with an
improved score of 91
Integrated in the base design of two properties in NSW (17
Kangaroo Avenue, Eastern Creek and 2 Burilda Close,
Wetherill Park)
20
Key Markets Overview
Mazda Facility, Victoria, AustraliaNick Scali & Plastic Bottles Facility, New South Wales, Australia Dachser and DSV Facility, Vaihingen, Germany
22
Australia – Economic Snapshot
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
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 4Q2018
GDP Annual Growth Rates (%)Key Economic Indicators
GDP Growth: 2.3% for the 12-month ended Dec
2018, lower than the preceding 12-month period,
with the slower growth due largely to softening in
the construction and residential sectors. Public
infrastructure investment continues to support the
economy
Low Unemployment rate: 5.2% in April 2019.
Wage growth in the 12 months to Nov 2018 was
2.4% and is expected to pick up gradually as the
labour market strengthens
Australian Dollar: In recent months, the Australian
dollar has come under pressure, possibly arising
from continued financial market volatility and global
trade tensions
Official Interest Rates: Cash rate maintained at
1.5%
Australian government 10-year bond yields:
1.71% as of 9 May 20190.0
1.0
2.0
3.0
4.0
5.0
2011 2012 2013 2014 2015 2016 2017 2018
Official Cash Rate (%)
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
Australian Population Growth(2)
Natural Increase Net Overseas Migration
Over the medium to long term, the
three major Australian cities of
Sydney, Melbourne and Brisbane
are expected to remain in the top
10 fastest growing major cities in
the developed world
This means that demand for
logistics space will continue to
grow in Australia, particularly as
Australians become more
accustomed to ecommerce as a way
to shop for goods
Governments across the nation
have now accepted that population
and freight growth need to be
catered for, and Australia now has
A$260 billion worth of major
transport infrastructure projects
under construction or planned
across 315 projects, up from
A$211 billion across 260 projects
only three years ago(1)
23
Australia – Population Growth and Infrastructure
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
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
24
Australian Industrial Market
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
View Outlook 2019
0
400
800
1,200
1,600
2,000
2,400
Q12010
Q12011
Q12012
Q12013
Q12014
Q12015
Q12016
Q12017
Q12018
Q12019
sq m ('000s) Australian Total Industrial Supply
Completed 10 year annual averageAnnualised as at Q1 2019
25
Sydney Industrial Market
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
$111 $109$112
$114
$119$121 $122
$124$129
$135$140
95
105
115
125
135
145
Q12009
Q12010
Q12011
Q12012
Q12013
Q12014
Q12015
Q12016
Q12017
Q12018
Q12019
Pri
me g
rad
e n
et
fact
ren
t $p
sm
p.a
.
Sydney Industrial Prime Grade Net Face Rents
0
100
200
300
400
500
600
700
800
Q12010
Q12011
Q12012
Q12013
Q12014
Q12015
Q12016
Q12017
Q12018
Q12019
SQ M ('000s)
Annualised as at Q1 2019
Sydney Industrial Total Supply
Completed 10 year annual average
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
26
Melbourne Industrial Market
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
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
$86
$83$84 $84
$87$88
$89 $89$90
$92$94
75
80
85
90
95
Q12009
Q12010
Q12011
Q12012
Q12013
Q12014
Q12015
Q12016
Q12017
Q12018
Q12019
Pri
me g
rad
e n
et
fact
ren
t $p
sm
p.a
.
Melbourne Industrial Prime Grade Net Face Rents
0
100
200
300
400
500
600
700
800
Q12010
Q12011
Q12012
Q12013
Q12014
Q12015
Q12016
Q12017
Q12018
Q12019
SQ M ('000s)
Annualised as at Q1 2019
Melbourne Industrial Total Supply
Completed 10 year annual average
27
Brisbane Industrial Market
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
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
0
100
200
300
400
500
600
Q12010
Q12011
Q12012
Q12013
Q12014
Q12015
Q12016
Q12017
Q12018
Q12019
SQ M ('000s)
Annualised as at Q1 2019
Brisbane Industrial Total Supply
Completed 10 year annual average
$114$116
$118$120 $120
$118 $118 $117$115
$110$112
90
100
110
120
130
Q12009
Q12010
Q12011
Q12012
Q12013
Q12014
Q12015
Q12016
Q12017
Q12018
Q12019
Pri
me g
rad
e n
et
fact
ren
t $p
sm
p.a
.
Brisbane Industrial Prime Grade Net Face Rents
28
Economic Snapshot – Europe
Germany
The German economy grew 1.5% for 2018, compared to 2.5%
a year ago
Solid domestic fundamentals, supported by a low
unemployment rate of 3.1% in February 2019 provides
support even as ongoing US-China trade tensions and Brexit
continue to have an impact on economic growth
The Netherlands
The Dutch economy grew 2.7% year-on-year in 2018, with
positive contributions from household consumption, capital
investments as well as a strong labour market.
Unemployment rate in the Netherlands on a seasonally
adjusted basis decreased to 3.3% in March 2019, from 3.6%
in December 2018
EURIBOR
EURIBOR remained in the negative range as at 31 March
2019
28
-0.4
-0.4
-0.3
-0.3
-0.2
-0.2
-0.1
-0.1
0.0
Dec-15 Apr-16 Aug-16 Dec-16 Apr-17 Aug-17 Dec-17 Apr-18 Aug-18 Dec-18
(%) EURIBOR
Source: Destatisches Bundesamt (Federal Statistics Office of Germany), CBS (Statistics Netherlands), Bloomberg, Reuters, Economist Intelligence Unit
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 4Q2018
German GDP Annual Growth Rates (%)
0.0
1.0
2.0
3.0
4.0
1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 4Q2018
Dutch GDP Annual Growth Rates (%)
Germany
Take-up and Prime Rent (for warehouse >5,000 sq m)
The Netherlands
Take-up and Prime Rent (for warehouse >5,000 sq m) Take-up : +31% (Q1 2019 vs Q1 2018)
Business confidence has been boosted by domestic demand and
industrial output over the past two years
All major occupier markets have recorded strong volumes of
transactions in Q1, with Venlo confirming its strong market position
Following two outstanding years, industrial and logistics investment
has unsurprisingly slowed in Q1 2019
Yields stabilised at 4.5% in Venlo, while prime rents have largely
remained unchanged from the preceding quarter
Take-up : -22% (Q1 2019 vs Q1 2018)
Take-up in Germany remained high at 1.2 million sq m
New supply for the rental market remains limited with users
contining to seek build-to-suit solutions
Investment activity dipped significantly in Q1 mainly due to a
lack of available logistics products in the major logistics hubs
Following a strong compression since 2016, average yields
have stabilised at 4.1% in the major distribution hubs
Industrial Markets Overview Germany and the Netherlands
Source: BNP Paribas Real Estate International Research
890 930 1,280 1,280 1,540 1,200
3,5504,270
4,800 4,2405,150
78 81 81 8286 86
0
20
40
60
80
100
0
1,500
3,000
4,500
6,000
7,500
2014 2015 2016 2017 2018 2019
000 sq m Q1 Q2-Q4 Prime rent €/sq m/yr
90 210 330690 550 720660
1,360690
1,5302,280
85 8275
80 83
0
20
40
60
80
100
0
500
1,000
1,500
2,000
2,500
3,000
2014 2015 2016 2017 2018 2019
Q1 Q2-Q4 Prime rent000 sq m €/sq m/yr
29
Strategy and
Conclusion
Beaulieu Carpets Facility, Queensland, AustraliaStanley Black & Decker Facility, Victoria, Australia
FLT’s four-pronged strategy to drive sustainable growth and distribution
1. Regulatory limit of not more than 10% of the company’s Deposited Property (subject to maximum of 25% only if additional 15% a llowance 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)
Deliver stable and regular distributions
to unitholders
Invest globally in logistics and
industrial assets
Achieve long-term growth in
DPU
Strategies to support the Principal Objectives
Active Asset
Management
Proactive leasing: Maintain high occupancy
rate, long WALE and well-diversified tenant base
Asset Enhancement: Assess and undertake
AEIs on the FLT portfolio to unlock further value
1
Selective
Development
Undertake development activities of properties
complementary to the FLT portfolio
– Development activities can be up to 10% of
the current AUM(1) as per MAS guidelines
Re-development of existing assets
Sponsor’s development pipeline
2
Acquisition
Growth
Pursue strategic acquisition opportunities of
quality industrial properties
– ROFR over 47 properties from FLT’s Sponsor
– Third-party acquisitions
3
Capital & Risk
Management
Optimise capital mix and prudent capital
management
4
Principal Objectives
31
Summary
FLT’s portfolio of 82 properties in Australia, Germany and the Netherlands provide positive
exposure to modern and developed logistics and industrial markets
Prime, Modern and High Quality Portfolio1
High occupancy rate with well-diversified tenant base2
Predominantly freehold and long leasehold land tenure3
Strong & Established Sponsor – Frasers Property Limited5
Long WALE, with no concentration of lease expiry4
32
Additional Info:
1HFY2019 Financial
Review
Rheinberg Facility, Rheinberg, Germany
Financial 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,
Dandenong South, Victoria
which was partially offset by:
• The effect of the FY2018 Divestments(2)
Adjusted net
property income(1) 96,796 66,805 44.9
Finance costs (14,751) (9,653) 52.8
• Higher borrowings drawn to finance the various acquisitions in FY2018 and
FY2019 and after taking in the proceeds from the FY2018 Divestments. The
weighted average Interest rate excluding upfront related expenses was 2.4%
per annum compared to 2.9% per annum for the corresponding period.
Distributable
income to
Unitholders
73,607 51,720 42.3
• Contributions from the various acquisitions;
which was partially offset by:
• Higher finance costs;
• 91.6% of management fees paid in the form of units (1HFY18: 72.8%); and
• Higher current income tax arising from higher distributable income
DPU
(Australian cents)3.63 3.40 6.8
• 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
(Singapore cents)3.54 3.61 (1.9)
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
34
Distribution
1.82 1.761.701.81
Australian Cents Singapore Cents
2QFY19 2QFY18
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
3.63 3.543.40
3.61
Australian Cents Singapore Cents
1HFY19 1HFY18
35
Balance 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
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$0.9878 as at 30 September 2018
Balance Sheet (A$’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
Net asset value per Unit (A$) 0.95 0.95
Net asset value per Unit (S$) 0.91 0.94
(1) (2)
36
Debt
1. Excluding upfront debt related expenses
2. Prior to reaching the 45.0% aggregate regulatory leverage limit
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$563 million(2)
As at 31 March 2019
Debt Maturity Profile
170 160
236
50
170
9 86
216
18 12
140
FY2019 FY2020 FY2021 FY2022 FY2023 >FY2024
A$ Debt (A$'M) € Debt (A$'M)
Terms for the five-year A$
term loan have been finalised
and are in an advanced stage
of documentation
37
Fixed, 79%
Variable, 21%
1. Includes Investment Property held for sale
Capital Management
3,018
2,017
1,0011,097
616481
Total Portfolio Australian Portfolio European Portfolio
Value (A$ million)
Debt (A$ million)
Investment Properties(1) and Debt (As at 31 March 2019)
Interest Risk Management (As at 31 March 2019)
Variable debt % of total debt
AUD 9%
EURO 12%
38
Frasers Logistics & Industrial Asset Management Pte. Ltd.
438 Alexandra Road | #21-00 | Alexandra Point | Singapore 119958
Tel: +65 6813 0588 | Fax: +65 6813 0578 | Email: [email protected]
www.fraserslogisticstrust.com