Lendlease Global Commercial REIT - Maybank Research 2024-02-05: Treading Water ~ Robust Reversions, Declining Dividends

• Lendlease Global Commercial REIT (SGX:JYEU)’s 1HFY24 DPU of S$0.022 fell 6.7% h-o-h and declined 14.3% y-o-y. Singapore malls are nearly full while garnering mid-teens positive reversion.

Positive portfolio performance was offset by higher borrowing costs.

• - Read this at SGinvestors.io -
• Despite improved NPI, distribution was down due to higher borrowing expenses.
• We factor in higher borrowing costs and lower our DPU estimates for Lendlease REIT by ~7% on average.

Steady retail, proactive office lease management

• Lendlease REIT's 1HFY24 revenue and NPI of S$119.9m and S$93.4m was up 17.9% and 22.2% y-o-y. Growth was led by improved operational performance of malls and recognition of supplementary rent from lease restructure of Sky Complex (offices in Milan). Excluding the supplementary rent (~S$13m), revenue and NPI for 1H rose 5.1% y-o-y.
• - Read this at SGinvestors.io -
• The recognized supplementary rent is approximately equal to two years of the prevailing rent of the returned building. Lendlease REIT intends to use the amount for fit-out capex and/or supporting distribution.

Improving operations; challenging funding conditions

• Read more at SGinvestors.io.

Krishna Guha Maybank Research | https://www.maybank-ke.com.sg/ 2024-02-05 SGinvestors.io

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