On the back of healthy leasing activities and an uplift in retail market sentiment, Lendlease Global Commercial REIT
Its portfolio committed occupancy remained high at 99.9% with a long weighted average lease expiry (WALE) of 8.0 years by net lettable area (NLA) and 5.3 years by gross rental income (GRI).
In the first three months of FY2024, the REIT’s manager de-risked leases expiring for the year to 3.9% by NLA and 7.8% by GRI.
Tenant sales continued to trend above pre-Covid average levels and registered a growth of 4.6% y-o-y in 1QFY2024, with visitation also growing 8.1% y-o-y during the period.
As of Sept 30, the committed occupancy for the REIT’s retail portfolio remained high at 99.7%, achieving a healthy tenant retention rate of 78.2% by NLA.
Meanwhile, the REIT’s long WALE of 11.8 years by NLA and 14.3 years by GRI for its office portfolio will continue to generate a stable income stream for unitholders, it says.
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Jem continues to be well-placed to tap the upcoming transformation of Jurong Gateway and the surrounding manufacturing and industrial landscape as part of the government’s decentralisation efforts. Its Grade A office building is leased to the Ministry of National Development till 2044 with a rental review every five years.
In Milan, Italy, three Grade A office buildings have been leased leased to Sky Italia until 2032, with income received are hedged to a rolling foreign exchange and an annual rental review based on 75% of ISTAT consumer price index variation
The Milano Santa Giulia business district, where LREIT’s Sky Complex is located, was awarded the LEED Neighborhood Development Gold certification. The certification is a globally recognised symbol of achievement and a benchmark for quality of life and sustainability.
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During the quarter, the manager refinanced LREIT’s €285 million ($412.6 million) loan due in FY2024. As at Sept 30, gross borrowings were $1,543.6 million with a gearing ratio of 40.6%. The weighted average debt maturity was 3.1 years with a weighted average cost of debt of 2.94% per annum4.
LREIT has an interest coverage ratio of 3.9x, which provides an “ample buffer” from its debt covenants at 2.0 times. All of its debt is unsecured with approximately 61% of its borrowings hedged to fixed rate.
As at Sept 30, LREIT has undrawn debt facilities of $118.7 million to fund its working capital. In addition, approximately 89% of LREIT’s total committed debt facilities are sustainability linked financing, which will continue to generate net interest savings to LREIT’s unitholders.
Kelvin Chow, CEO of the manager, says: “Against a backdrop of global uncertainties, we are pleased to deliver a good set of operational performance underpinned by proactive asset management strategy.”
“Moving forward, we will continue to strengthen our portfolio and exercise prudence in our capital management,” he adds.
Units in LREIT closed 0.5 cents or 0.89% down at 55.5 cents on Nov 7.
