Lendlease Global Commercial REIT (LREIT) JYEU has announced a distribution per unit of 2.10 cents for its 1HFY2024 ended Dec 31, 2023, compared to 2.45 cents for the same period last year, as a result of higher borrowing costs amidst higher interest rates.
For the half-year period, gross revenue was up 17.9% y-o-y to $119.9 million, boosted by improved operational performance from the REIT’s retail malls and recognition of supplementary rent from the lease restructure with Sky Italia.
Consequently, net property income (NPI) for 1HFY2024 was up 22.2% y-o-y to $93.4 million.
Excluding the supplementary rent recognised in advance, both gross revenue and NPI increased by 5.1% y-o-y.
For 1HFY2024 and after the lease restructure with Sky Italia, the REIT achieved a portfolio occupancy of 87.9%, with a weighted average lease expiry period of 7.9 years by net lettable area (NLA) and 4.9 years by gross rental income (GRI).
As at Dec 31, 2023, LREIT’s retail portfolio continued to maintain a high committed occupancy rate of 99.6% with a positive retail rental reversion of 15.7% against the REIT’s proactive asset management and leasing strategy.
Tenant sales increased 0.6% y-o-y in 1HFY2024 with visitation trending close to pre-Covid average levels. As at the period end, the retail portfolio has maintained a healthy tenant retention rate of 80.6% with essential services accounting for the majority of trades at approximately 57% by GRI.
Kelvin Chow, CEO of the manager, says: “We continued to see good operational performance with positive retail rental reversion and higher tenant sales in the firsthalf of FY2024 for our Singapore portfolio. In Milan, the lease restructure with Sky Italia is a pertinent move given the continued work-from-home trend in Europe. This exercise allows us to mitigate the pre-termination risk and enables us to continue maintaining cashflow stability for our unitholders.”
“Moving forward, we remain focused on active capital management to manage cost and gearing. Concurrently, in this interest rate environment, we will stay flexible and adaptive while monitoring the market for potential additional hedging as appropriate,” he adds.
Units in LREIT closed 1 cent lower or 1.59% down at 62 cents on Feb 1.
