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Lendlease Global Commercial REIT posts 2.6% higher 1HFY2022 DPU of 2.40 cents

By Felicia Tan

/ The Edge Singapore |

February 4, 2022 3:06 AM SGT

SINGAPORE (EDGEPROP) - The manager of Lendlease Global Commercial REIT (LREIT) has reported a distribution per unit (DPU) of 2.40 cents for 1HFY2022 ended Dec 30, 2.6% higher than the DPU of 2.34 cents in the corresponding period the year before.

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The higher DPU was due to the higher distributable income in 1HFY2022, which grew 3.8% y-o-y to $28.6 million.

Gross revenue for the period fell 5.8% y-o-y to $39.2 million due to the lower rental reversion at 313@Somerset and lower revenue from Sky Complex in Italy due to foreign exchange.

Net property income for the period was $29.6 million, 2.5% lower y-o-y. This was partially offset by lower property operating expenses of $1.7 million or 14.9% from the absence of doubtful debt provisions and lower expenses contributed from marketing, insurances, salary & related expenses.

Retail mall 313@Somerset, as at end-December, reached a record-high occupancy rate of 99.7% with a high tenant retention rate of 75.8% (Photo: Samuel Isaac Chua/EdgeProp Singapore)

LREIT’s profit before tax and change in fair value, however, surged more than 6.6 times to $35.3 million in the 1HFY2022 from $5.3 million previously due to net foreign exchange gain of $16.9 million in the period, compared to the net foreign exchange loss of $14.6 million.

As at end-December, LREIT reported an all-time high portfolio occupancy rate of 99.9%, with a weighted lease average expiry (WALE) of 8.4 years by net lettable area (NLA) and 4.4 years by gross rental income (GRI). About 2% of the REIT’s total NLA is due for renewal for the rest of FY2022.

Cash and cash equivalents as at end-December stood at $47.5 million.

Prime Orchard Road retail mall 313@Somerset, as at end-December, reached a record-high occupancy rate of 99.7% with a high tenant retention rate of 75.8%. The performance was driven by the manager’s proactive leasing strategy, with new offerings to rejuvenate the mall, says the REIT. New tenants in the mall include F&B outlets Ohayo Mama San, Ramburger and Chimi’s, as well as Oakley and Pearly Lustre retail stores.

Overall performance was boosted by the additional stake in Jem, which has shown resilience, evidenced by its ability to rebound faster than its downtown competitors (Photo: The Edge Singapore)

Looking ahead, the REIT will utilise the 660 sq ft arising from the increase in permissible plot ratio from 4.9+ to 5.6 in two prime, ground floor units at 313@Somerset to expand leasable area and unlock value for its unitholders.

In Jurong East, Jem’s office portfolio remains 100% leased to the Ministry of National Development (MND) for a 30-year lease term.

In Italy, the REIT’s Sky Complex saw its three grade-A office buildings fully occupied by a single tenant. The buildings are also being operated on a triple-net lease structure.

LREIT’s financial position remains strong, says Kelvin Chow, CEO of the manager. Overall performance was boosted by the additional stake in Jem, which has shown resilience, evidenced by its ability to rebound faster than its downtown competitors. “Suburban malls have demonstrated relevance and resilience during the Covid-19 pandemic,” he adds.

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