Jem and 313@Somerset achieved rental reversion estimated at +6.1% in 2HFY23 and the positive momentum is expected to sustain into FY24.
Lendlease REIT will focus on capturing the upside from 313@Somerset due to the tourism recovery and increased shopper traffic from the multi-functional event space at Grange Road Car Park. Management intends to continue expanding in Singapore.
Sky Complex benefitting from higher inflation. Sky Complex in Milan achieved rental escalation of 5.9% effective May 23. Sky Complex maintained full occupancy of 100%. It is on a long-term lease to Sky Italia until 2032 and annual rental escalation is based on 75% of the changes in ISTAT consumer price index (CPI).
Resiliency with stable margins and long WALE. NPI margin was stable at 75.2% in 2HFY23, which demonstrates Lendlease REIT’s ability to weather the negative impact from higher cost of utilities. Lendlease REIT has long portfolio WALE of 8.2 years by NLA and 5.5 years by GRI as of Jun 23.
Rise in capital values anchored by Singapore. Portfolio valuation has increased by 1.4% y-o-y to S$3.7b due to higher market rents and improved sentiment in the retail sector. Valuation for Jem and 313@Somerset increased 2.5% and 4.0% respectively. Valuation for Sky Complex dropped 9.2% as terminal cap rate expanded 75bp to 5.75%.
Weathering impact of higher interest rates.
Read more at SGinvestors.io.
Above is an excerpt from a report by UOB Kay Hian Research. Clients of UOB Kay Hian may be the first to access the full PDF report @ https://www.utrade.com.sg/.
