Lendlease Global Commercial REIT (LREIT) has announced an increase in distributable income by 95.9% y-o-y to $56 million for its 1HFY2023 that ended in December, which translates to an annual distribution that was 2.45 cents.
The revenue from the period nearly tripled by more than doubling to $101.7 million, primarily through Jem’s acquisition in Jem in April 2022 and improved operating performance at 313@Somerset. This resulted in a higher income from net property earnings of $76.4 million in 1HFY2023.
At December 31, 2022, the total borrowings of LREIT were $1.45 billion, with an estimated gearing ratio at 39.2%. Approximately 62% of LREIT’s borrowings are sustainability-linked financing, which are expected to generate net interest savings to its unitholders.
The average maturity of debt was 2.6 years, with an average weighted expense at 2.35% per annum. LREIT boasts an interest coverage rate that is 5.5 times.
The portfolio’s committed occupancy was as 99.8% with a weighted average lease expiry (WALE) of 8.3 years by net lettable area (NLA) and 5.3 years of Gross Rental Income (GRI). Leases due to expire for the year were reduced up to 5.9% from 8% prior to that through NLA in addition to 9.6% from 14.5% earlier by GRI.
The inventory of retail properties’ occupancy was at 99.5% as at Dec 31, 2022 . It also had positive retail rental reversion of around 2%.
At the end of the period in the year, both the sales of tenants and visitation rates surpassed pre-Covid-19 levels, growing 5 percent and 2.8 times yearly, respectively. 1HFY2023.
The retail portfolio boasts good tenant retention rates in the range of 72.4% with essential services comprising the bulk of trades , which is around 58% according to GRI.
In addition, the office portfolio of LREIT has seen a positive rate of rental escalation of around 4% and a WALE of 12.4 years as per NLA as well as 15.3 years according to GRI.
“We believe that the retail assets of LREIT will profit from China’s reopening to boost foot traffic as well as sales by tenants to the retailers’ properties,” says CEO of the manager Kelvin Chow.
Units of LREIT were trading at an unchanging 73.5 cents on February 7.