Lendlease Global Commercial REIT (LREIT) has announced a 10.7% retail rental reversion for the first half of FY2025, reflecting the resilience of its retail portfolio. Despite this positive development, the REIT faced lower gross revenue and net property income (NPI), primarily due to the absence of supplementary rent from the Sky Complex lease restructure.
The REIT’s financial performance in 1H FY2025 saw gross revenue fall by 13.6% year-on-year to S$103.6 million, while NPI decreased by 19.8% to S$74.9 million. This decline was attributed to the upfront recognition of supplementary rent in December 2023. Additionally, higher finance costs, driven by a new EURIBOR interest rate hedge, impacted distributable income, which fell to S$43.5 million, translating to a distribution of 1.80 cents per unit.
Operationally, LREIT’s portfolio occupancy improved to 92.3% by the end of December 2024, with a long weighted average lease expiry (WALE) of 7.2 years by net lettable area. The retail portfolio maintained a high occupancy rate of 99.9%, while the office portfolio saw an increase in occupancy to 86.6%.
LREIT has also secured S$560 million in sustainability-linked loan facilities to refinance its maturing loans in 2025, with 70% of borrowings hedged to fixed rates. The REIT’s gearing ratio stood at 40.8%, with a weighted average debt maturity of 2.0 years.
Looking ahead, construction has commenced on a multifunctional event space adjacent to 313@somerset, expected to be completed in the second half of 2026. CEO Kelvin Chow expressed optimism, stating, “Our retail portfolio continues to demonstrate resilience with positive rental reversions.” The REIT aims to maintain leasing momentum and prudent capital management in the near term.
