The manager of Lendlease Global Commercial REIT (LREIT) has reported a distribution per unit (DPU) of 2.40 cents for the 1HFY2022 ended December, 2.6% higher than the DPU of 2.34 cents in the corresponding period the year before.
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.
During the half-year period, property operating expenses stood 14.9% y-o-y lower at $9.5 million, mainly due to the absence of net provision for doubtful debts of $1.5 million and lower expenses contributed from other expenses.
As a result, 1HFY2022 net property income (NPI) fell 2.5% y-o-y to $29.6 million.
LREIT’s profit before tax and change in fair value, however, surged more than six 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.
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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 assets (NLA) and 4.4 years by gross rental income (GRI).
About 2% of the REIT’s total net lettable assets (NLA) are due for renewal for the rest of FY2022 as at end-December.
Cash and cash equivalents as at end-December stood at $47.5 million.
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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 and refreshed new offerings to rejuvenate the mall, says the REIT.
Looking ahead, the REIT says it will utilise approximately 660 sq ft arising from the increase in permissible plot ratio from 4.9+ to 5.6 in two prime units at the ground floor of 313@Somerset to expand leasable unit space and unlock value for its unitholders.
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.
“With a long lease term until 2032 and annual rental escalation based on 75% of ISTAT consumer price index variation, Sky Complex is projected to provide stable income stream to the portfolio,” says the REIT in a statement on Feb 4.
“Overall performance was boosted by the additional stake in Jem and LREIT’s financial position remains strong. This points to the underlying strength of our well-located assets and our continuous focus on enhancing our retail mall’s offerings,” says Kelvin Chow, CEO of the manager.
“Suburban malls have demonstrated relevance and resilience during the Covid-19 pandemic. Jem has showed its resilience as evidenced by its ability to rebound faster than its competitors from the downturn,” he adds.
Units in LREIT closed 3 cents higher or 3.66% up at 85 cents on Feb 4.
