Mapletree Logistic VS Frasers Log & Com Trust
In this article, we’ll be doing a 1-vs-1 comparison between Mapletree Logistic Trust and Frasers Logistic Commercial Trust to see which counter is “better” for the provision of logistic exposure in a diversified REIT portfolio.
I will be comparing these two REITs based on the following criteria and coming out with a conclusion based on the assumption that I can only invest in either one of the REITs without any consideration of valuation:
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The article is best viewed on a desktop. Without further ado let’s get started.
1. Underlying Property Allocation
Frasers Log & Com Trust
Frasers Logistic & Commercial Trust is an industrial REIT that operates mainly across Australia and Europe. FLCT portfolio comprises a majority of logistic and industrial properties (70%) with a minor allocation of commercial properties (30%).
Mapletree Logistic Trust
Mapletree Logistic Trust is an industrial REIT that focuses on Asia logistics real estate. Overall, the trust has a diversified allocation across the countries within Asia, though the trust has a major allocation in Singapore, Hong Kong and China with over 60% allocation in these three countries.
Winner: FLCT
For the metrics of underlying properties, Mapletree Logistics Trust would be a better pick for a more diversified and pure logistic play.
However, with the current friendshoring trend and market outlook, I’d prefer FLCT’s geographical exposure even though they are more concentrated and have an allocation in commercial properties.
Read more: Whats Next For Singapore REITs In 2025
Depending on your views on the global logistic industry, either REIT would be a reasonable pick given the drastic difference in the geographical exposure and the role they have to play in a diversified portfolio.
2. Occupancy Rate & WALE
Frasers Log & Com Trust
Frasers Logistic & Commercial Trust’s occupancy rate and WALE have exhibited drastically different behaviour between the different sectors with the Logistic & Industrial sector essentially compensating for the underperformance of the Commercial properties.
This phenomenon is universal across the developed market as on one end, the trend of friendshoring is driving business back to their country of origin/operation thereby increasing the demand for industrial/logistic space.
On the other hand, the post-covid hybrid working environment has resulted in companies reducing their commercial space needs thereby driving down the occupancy rate of offices and commercial properties.
Mapletree Logistic Trust
Mapletree Logistics Trust’s occupancy rate and WALE have exhibited slight weakness in recent years mainly due to the headwinds experienced in their China properties.
That said, the management has acknowledged the ongoing trends and is actively making an effort to restructure their portfolio’s allocation to achieve a better geographical positioning.
Winner: Tie
For the metrics of property resiliency, FLCT and MLT have exhibited similar behaviour of an overall weakness in recent years and therefore it is a tie.
While the headwinds experienced from both counters are different – Commercial properties for FLCT and China exposure for MLT – both REITs have seen a decrease in occupancy rate and WALE which is equally undesirable.
3. Distribution Behaviour & Breakdown
Frasers Log & Com Trust
Frasers Logstic & Commercial Trust’s DPU from operations have experienced a consistent year-on-year decline. Coupled with an increase in Units in Issue, the DPU From Operations per unit has experienced over 20% from 2021 to 2024.
While the impact of this is not fully felt in the reported distribution, the DPU moving forward would inevitably reveal the true weakness once the one-off items such as divestment gains are absent.
Mapletree Logistic Trust
Mapletree Logistic Trust’s DPU from operations has exhibited decent growth from 2020 to 2023 but has since come down in 2024 due to the headwinds experienced in China. That said, MLT had still managed to grow their DPU from operations by 1.6% from 2020 to 2024 despite the dilution impact and headwinds experienced.
Winner: MLT
For the metrics of distribution behaviour and breakdown, the winner is MLT. Not barring the recent weakness in China, the management has exhibited a decent ability to grow their DPU from operations over the years which is absent in FLCT.
4. Balance Sheet Health
Frasers Log & Com Trust
Frasers Logistic & Commercial Trust's balance sheet health is relatively healthier than the majority of the REITs listed in Singapore and the management has displayed strong capabilities in their capital management strategy. This can be seen in their ability to manage their average cost of debt in the face of a higher for longer interest rate environment.
Mapletree Logistic Trust
On the other hand, Mapletree Logistic Trust’s balance sheet health is merely at an acceptable level. If we were to include the use of perpetual securities and treat it as debt, the health of the balance sheet might not be as desirable as the aggregate leverage have exceeded 40%.
Winner: FLCT
For the metrics of financial health, Frasers Logistic Commercial Trust is the clear winner in this category as their aggregate leverage is significantly lower than MLT and the management has displayed competency in their capital management strategy.
Overall Winner: Mapletree Logistic Trust
Without the consideration of valuation, if I could only invest in either Frasers Logistics & Commercial Trust or Mapletree Logistic Trust, I’d have to go with Mapletree Logistic Trust, solely because the management has displayed a level of competency in their ability to deliver DPU growth before the headwinds experienced in their China properties.
That said, given the difference in the underlying geographical exposure, the behaviour of MLT is different from that of FLCT is vastly different and as such, a comparison between these two REITs may not be a good apple-to-apple comparison.
Ultimately, it depends on what your overarching strategy for your REIT portfolio is, your views for the global industrial (logistic) industry in the coming years and your game plan on how you intend to manage your portfolio to maximize your dividend yield and minimize your risk of capital losses.
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Disclaimer:
This article is meant to be the opinion of the author
This article is for information purposes only
This article should not be seen as financial advice
This advertisement has not been reviewed by the Monetary Authority of Singapore
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