Lendlease Global Commercial REIT - DBS Research 2024-02-06: Rental Uplift Of +15% At Sky Complex Post Lease Restructuring

• Lendlease Global Commercial REIT (SGX:JYEU)'s 1HFY24 gross revenue rose 17.9% y-o-y to S$119.9m (+5.1% y-o-y after exclusion of supplementary rent from Sky Italia lease restructuring). NPI rose 22.2% y-o-y to S$93.4m.
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Lendlease REIT's 1HFY24 results highlights

• Retail reversions came in at a strong 15.7%.
• Portfolio occupancy declined to 87.9% and was within expectations (SG assets maintained at ~100% occupancy), primarily due to a ~20% decline in Sky Complex’s occupancy, where master lease tenant Sky Italia returned one out of three towers at the property.
• Tenant sales rose 0.6% y-o-y, to be maintained within the range of ~110%-120% of pre-COVID levels in CY 2H24 with a similar boost in sales across December festivities with a spike to ~150% of pre-COVID levels.
• - Read this at SGinvestors.io -
• Supplementary rent received during this period from the Sky Italia lease restructuring was worth two years of rent from Block 3.
• Gearing reached 40.5% as at 31 December 2023, with an average cost of debt of 3.38% (+43bps q-o-q), higher than expectations.
• Interest coverage ratio was 3.8x, with 61% of debt coming under fixed borrowing cost.

Well-positioned assets to capture domestic footfall.

• Read more at SGinvestors.io.

Geraldine WONG DBS Group Research | Derek TAN DBS Research | https://www.dbs.com/insightsdirect/ 2024-02-06 SGinvestors.io

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