FLCT: Logistics property demand to slow as pandemic stabilizes

An artist's impression of the property under development at Worcester Six, a new business park in West Midlands, U.K. Frasers Logistics & Commercial Trust entered a deal to acquire the development property in late November 2021. Credit: FLCTAn artist's impression of the property under development at Worcester Six, a new business park in West Midlands, U.K. Frasers Logistics & Commercial Trust entered a deal to acquire the development property in late November 2021. Credit: FLCT

Frasers Logistics & Commercial Trust (FLCT) expects demand for logistics and industrial properties will continue to grow, but at a slower pace, according to minutes of the annual general meeting (AGM) filed to SGX Friday.

According to the minutes, Robert Stuart Claude Wallace, CEO of the trust’s manager, said FLCT is seeing good occupier demand for its industrial properties, which it expects to continue amid a general trend toward e-commerce. The statement was in response to a unitholder question. 

“In relation to customers, it is expected that the demand for such properties will continue to grow, but not at the levels seen in the past 12 to 18 months,” the minutes said. “The CEO also noted that, from an investment demand viewpoint, there has been a strong demand for industrial properties in all the markets, and FLCT expects such demand to grow, but, similarly, not at the same rates as the previous year.”

In response to a question, the CEO said that while logistics properties in developed markets are more expensive, FLCT had no immediate plans to acquire logistics properties in Eastern European markets as it prefers locations where it has “feet on the ground,” according to the minutes.

“The CEO acknowledged that while the developed markets are more expensive, there are still opportunities for growth in the cheaper debt markets and through other types of funding, and by developing sites that FLCT already owns,” the minutes said. “The chairman stated that as FLCT is a long-term investor, country risk is therefore an important factor.”

The chairman is Ho Hon Cheong.