Frasers Logistics & Commercial Trust’s DPU Held at 2.95 Cents: What Supports It?

Frasers Logistics & Commercial Trust (SGX: BUOU) declared a distribution of 2.95 Singapore cents per unit for the six months ended 30 September 2026, matching the same period last year. The result, announced on 6 November 2026, raises a useful question for unitholders: what is supporting the unchanged payout? The financial statements are unaudited. [S2, p. 1] [S2, p. 4]

More income, less from divestment gains

The manager reported 2.88 cents of DPU before capital distributions of divestment gains, up from 2.69 cents a year earlier. The divestment-gain contribution fell from 0.26 to 0.07 cent, leaving total DPU unchanged at 2.95 cents. For the full financial year, total DPU was 5.90 cents, against 5.95 cents in FY2025. These figures suggest that the second-half payout relied less on distributed sale gains than it did a year earlier. [S3, p. 1]

The distribution statement shows S$109.0 million of income available for distribution to unitholders, versus S$101.0 million a year earlier. Adding the separately reported capital distribution brought second-half distributable income to S$112.5 million, compared with S$111.7 million. The capital distribution in this accounting reconciliation was S$3.5 million, including S$3.0 million of divestment gains. [S2, p. 4]

That accounting line needs care. The declared payout also has a 1.72-cent capital distribution component for Singapore tax purposes, up from 0.34 cent a year earlier. That label describes how the payment is treated for tax; it should not be read as saying that 1.72 cents came from property-sale gains. The notice says this component reduces a unitholder’s cost base for Singapore tax purposes. Individual circumstances can differ. [S1, p. 1] [S2, p. 4] [S2, p. 41]

The cash picture is tighter

Adjusted net property income rose from S$164.9 million to S$180.6 million. The manager attributed the increase partly to logistics and industrial rent increases, currency movements, higher occupancy at Alexandra Technopark and acquired properties. Adjusted net property income excludes straight-line rental adjustments and adds lease payments for right-of-use assets; it is a manager-defined measure, rather than cash available for distribution. [S2, p. 3] [S2, p. 34]

Cash tells a less comfortable story. Net cash from operations fell from S$178.1 million to S$165.6 million. Interest paid, which the cash-flow statement classifies under financing activities, rose from S$43.0 million to S$46.8 million. After also accounting for capital and other expenditure on investment properties, the comparable cash figure fell from about S$112.2 million to S$94.7 million. This is a simple cash-flow comparison, not the trust’s formal distributable-income measure; it excludes acquisitions, borrowing movements and distribution timing. [S2, p. 9]

The second half also included a S$173.6 million fair-value loss on investment properties, helping turn the period’s return attributable to unitholders into a S$64.4 million loss. The distribution reconciliation adds back that non-cash valuation change. It would therefore be misleading to equate the accounting loss with an equivalent cash shortfall, though the weaker cash comparison still warrants attention. [S2, p. 3] [S2, p. 4] [S2, p. 9]

Watch borrowing costs

At 30 September 2026, aggregate leverage was 39.2%, up from 35.7% a year earlier. FLCT reported an interest coverage ratio of 4.5 times and S$234 million of undrawn committed facilities, alongside roughly S$207 million of loans and borrowings due in FY2027. Its manager expects borrowing costs to rise in FY2027 because of variable-rate debt and refinancing. Those are disclosed expectations and positions as at the results announcement, not evidence that future refinancing has already been completed. [S2, p. 36] [S2, p. 39]

For this declared distribution, the announced ex-distribution date is 18 November, the record date is 19 November and the scheduled payment date is 23 December 2026. The timetable may change. Beyond that payment, the next results should show whether improved property income can continue to offset higher financing costs and translate into stronger cash flow. [S1, p. 4]