Lendlease Global Commercial REIT (LREIT) has reported a distributable income growth of 95.9% y-o-y to $56 million in its 1HFY2023 ended December, translating to a distribution per unit of 2.45 cents.
Gross revenue for the period more than doubled to $101.7 million, contributed mainly by the acquisition of Jem in Apr 2022 and better operating performance at 313@somerset. This has resulted in higher net property income of $76.4 million for 1HFY2023.
As at Dec 31, 2022, LREIT’s gross borrowings stood at $1.45 billion with a gearing ratio of 39.2%. Approximately 62% of LREIT’s borrowings are sustainability-linked financing, which are expected to generate net interest savings to its unitholders.
The weighted average debt maturity was 2.6 years with a weighted average cost of debt of 2.35% per annum. LREIT has an interest coverage ratio of 5.5 times.
LREIT’s portfolio committed occupancy stood at 99.8% with a weighted average lease expiry (WALE) of 8.3 years by net lettable area (NLA) and 5.3 years by gross rental income (GRI). Leases expiring for the year have been further de-risked to 5.9% from 8% previously by NLA and 9.6% from 14.5% previously by GRI.
The REIT’s retail portfolio’s occupancy rate stood at 99.5% as at Dec 31, 2022 with a positive retail rental reversion of approximately 2%.
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As at the period end, the tenant sales and visitation surpassed pre-Covid-19 average levels, increasing by 5 times and 2.8 times y-o-y respectively in 1HFY2023.
The retail portfolio has a healthy tenant retention rate of 72.4% with essential services accounting for the majority of trades at approximately 58% by GRI.
Meanwhile, LREIT’s office portfolio posted positive rental escalation of approximately 4% and WALE of 12.4 years by NLA and 15.3 years by GRI.
“We are optimistic that LREIT’s retail assets will benefit from China’s reopening to generate higher footfall and tenants’ sales for our retail properties,” says CEO of the manager Kelvin Chow.
Units in LREIT closed at an unchanged 73.5 cents on Feb 7.
