Lendlease Global Commercial Reit H2 DPU down 8% to S$0.0225

THE manager of Lendlease Global Commercial Reit (Lendlease Reit) posted a distribution per unit (DPU) of S$0.0225 for the second half of FY2023 ended June 2023, down 8 per cent from S$0.0245 in the corresponding period a year earlier.

Distributable income rose 21.6 per cent to S$52.2 million, from S$42.9 million a year earlier, while gross revenue climbed 65.1 per cent to S$103.1 million over the same period.

In a bourse filing on Monday (Aug 7), the Reit manager attributed the higher gross revenue to the acquisition of Jem in April 2022, as well as the easing of Covid-19 measures. However, this was offset by lower revenue from Sky Complex in Milan as the euro weakened against the Singdollar.

The manager noted that property operating expenses rose 54.3 per cent to S$25.6 million due to the acquisition of Jem.

Finance costs also more than doubled to S$27.8 million, from S$10.4 million a year earlier due to incremental borrowings to fund the Jem acquisition, as well as a higher average interest rate.

For the full year, Lendlease Reit’s distribution per unit stood at S$0.047, down 3 per cent from the S$0.0485 it posted in FY2022.

Net property income jumped 103.9 per cent to S$153.9 million, while gross revenue soared 101.5 per cent to S$204.9 million.

The Reit continues to see portfolio committed occupancy of 99.9 per cent, with weighted average lease expiry of 8.2 years by net lettable area, assuming Sky Italia does not exercise its break option in 2026.

The Reit also saw retail rental reversion of 4.8 per cent on a weighted average basis, as well as office rental escalation of 5.9 per cent at its Sky Complex property, effective May 2023.

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Meanwhile, in a separate filing, the Reit manager said Lendlease Group’s Asia chief executive Justin Gabbani will be appointed chairman of the manager’s board from Aug 8. The manager on Jul 19 announced that Ng Hsueh Ling would be stepping down as chairman of the board.

Units of Lendlease Reit closed flat at S$0.67 on Monday, before the results were released.