The REIT Manager’s principal objectives are to deliver regular and stable distributions to Unitholders and to achieve long-term growth in distributions per Unit and in the net asset value per Unit, while maintaining a sustainable capital structure. The Manager has adopted a four-pronged strategy to guide the REIT’s future growth.
The Manager will source and pursue strategic asset acquisition opportunities of quality industrial properties which provide attractive cash flows and yields as well as satisfy the REIT’s investment mandate. In doing so, the Manager seeks to generate stable and growing income streams which will enhance returns to Unitholders.
While FLT was established with an initial focus on Australia, the Manager will evaluate investment opportunities within Australia and in other global industrial markets. A measured approach will be taken when evaluating acquisitions which meet FLT’s investment mandate.
The Manager will endeavour to selectively undertake development activities either jointly or on its own, including greenfield developments; build-to-suit developments and subsequent acquisitions that are deemed complementary to the existing portfolio; and re-development of existing assets. In carrying out development activities, the Manager will prudently consider overall benefits to Unitholders and the requirements of prospective tenants.
With a strong commitment to environmental sustainability, FLT seeks to assess development and construction risks in the region. Additionally, in the development of existing or future properties, FLT will anticipate future sustainability needs and incorporate cost-saving, sustainability initiatives within the designs.
The Manager will proactively manage FLT’s portfolio properties to improve operational performance, allowing the REIT to optimise the cash flow and the value of its properties. A disciplined and frequent review of asset strategies, involving monitoring market trends; development, occupier and investment dynamics; and a meticulous analytics and valuation process, will allow the Manager to adjust strategies to take advantage of opportunities and maximise returns. Where appropriate this may involve divesting and recycling non-core assets.
The asset management team at FLT, when possible, will deliver asset enhancement initiatives (“AEI”) which are income and value accretive. The Manager will consider utilising the resources of the Sponsor and its subsidiaries to assess and undertake AEIs on assets within FLT’s portfolio to unlock value and create sustained growth for Unitholders.
The Manager seeks to optimise the capital structure and cost of capital by employing an appropriate mix of debt and equity to finance growth. While adopting appropriate gearing levels to ensure optimal returns to Unitholders, FLT will also maintain flexibility to pursue future capital expenditures or acquisitions. In addition, FLT’s capital management strategy calls for periodic assessments of the diversification of its sources of debt financing, including tapping into the public capital markets.
Given the Manager’s global investment mandate, there is a need to manage currency risks. The Manager has adopted currency risk management strategies that includes the use of foreign currency-denominated borrowings to match the currency of the asset investment as a natural currency hedge. The Manager will also manage foreign exchange volatility with hedging nstruments and regularly evaluate the feasibility of implementing the appropriate level of foreign exchange hedges.