Lendlease Global Commercial REIT - UOB Kay Hian 2024-02-05: 1HFY24 DPU Augmented By Supplementary Rent In 2024 & 2025

• Lendlease REIT achieved strong positive rental reversion of 15.7% (313@Somerset: 20%, Jem: 10%) in 1HFY24. Committed occupancy for its retail properties was stable at 99.6%.
• Lendlease REIT has received supplementary rent, estimated at S$13m and equivalent to 0.55 cents per unit, from Sky Italia for Building 3. It will distribute the supplementary rent to unitholders over a two-year timeframe in 2024 and 2025.

1HFY24 Results

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Recognised supplementary rent from Sky Complex.

• Gross revenue and NPI increased 17.9% and 22.2% y-o-y respectively in 1HFY24 due to supplementary rent from lease restructuring with Sky Italia recognised in advance.
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Retail properties generated strong positive reversions.

• Lendlease REIT’s retail portfolio generated positive retail rental reversion of 15.7% in 1HFY24 (313@Somerset: 20%, Jem: 10%) (FY23: 4.8%). It maintained high committed occupancies of 98.9% for 313@Somerset and 100.0% for Jem.
• Tenant retention rate was healthy at 80.6%. Tenant sales increased 0.5% y-o-y. Essential services accounted for 57% of gross rental income.

Option to pre-terminate removed from restructured leases.

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Jonathan KOH CFA UOB Kay Hian Research | https://research.uobkayhian.com/ 2024-02-05 SGinvestors.io

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