Lendlease Global Commercial REIT has reported an improved portfolio committed occupancy of 88.8% as at March 31 versus 87.9% as at last December, as it secured more takers for its office space in Italy, the Sky Complex.

In its 3QFY2024 business update, LREIT, whose key assets are stakes in three retail malls in Singapore, was able to achieve a committed occupancy of 99.4% for its retail assets.

It was also able to achieve a positive rental reversion of 15.3%, as well as a healthy retail tenant retention rate of 86.2%.

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Tenant sales continued to grow 2.6% y-o-y in 3Q FY2024, and visitation also increased 6.1% y-o-y in the same quarter.

“We are pleased to deliver another quarter of healthy operational performance,"  says Kelvin Chow, CEO of the REIT's manager.

"The leasing progress at Building 3 of Sky Complex is an encouraging step towards our strategic repositioning to secure multi-tenancy at market rents.

"Moving forward, we will continue to remain focused on prudent capital management to manage cost and gearing," he adds.

LREIT continued to maintain a long portfolio weighted average lease expiry of 7.8 years by net leasable area and 4.8 years by gross rental income.

According to LREIT, it was able to secure power at lower rates which will help reduce utilities expenses by approximately 30% per year for the next two years and help to cushion against the increase in other expenses.

Read also: Lendlease Global Commercial REIT announces DPU of 2.45 cents for 1HFY2023

As at March 31, LREIT's gross borrowings were $1.57 billion with a gearing ratio of 41.0%, with an interest coverage ratio of 3.4 times.

LREIT shares closed at 55 cents on May 6, up 2.8% for the day but down 14.06% year to date.

This article first appeared on The Edge Singapore.