Lendlease Global Reit posts H1 DPU of 2.34 S cents

LENDLEASE Global Commercial Reit (Lendlease Global Reit) on Wednesday posted a H1 distribution per unit (DPU) of 2.34 Singapore cents for the six months ended Dec 31, 2020, up 0.8 per cent from the previous year's DPU of 2.32 cents derived from annualised results.

Annualised results for the six months ended Dec 31, 2019 are based on the actual results from Oct 2, 2019 to June 30, 2020 prorated to 366 days, deducting for the Reit's actual results from Jan 1, 2020 to June 30, 2020.

Gross revenue for H1 FY2021 rose 3.2 per cent year on year to S$41.6 million from S$40.3 million previously.

In its filing, the Reit manager said this was largely driven by the strengthening of the euro against the Singapore dollar for Sky Complex, as well as improved operational efficiency to reduce costs and conserve cash at 313@somerset.

Property operating expenses were S$11.2 million, up S$0.8 million or 7.6 per cent from a year ago. The higher expenses were mainly attributable to a S$1.5 million provision for doubtful debts which was partly offset by S$0.7 million of lower repair & maintenance expenses, salary & related expenses, property taxes, operating expenses and utilities expenses.

As such, net property income for H1 FY2021 rose 1.6 per cent to S$30.4 million from S$29.9 million in the previous annualised half year.

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The latest H1 DPU translates to an annualised distribution yield of 6.36 per cent, which is 139 basis points above the previous year's yield of 4.97 per cent.

The Reit's portfolio occupancy as at Dec 31, 2020 stood at 99.7 per cent, with a weighted average leasehold expiry of 9.3 years by net lettable area (NLA) and 4.9 years by gross rental income (GRI). Approximately 2 per cent and 6 per cent of the portfolio NLA and GRI remain for renewal and review, respectively, in FY2021.

Lendlease Global Reit's manager noted continued positive quarter-on-quarter traction in tenant sales and footfall at its prime retail asset 313@somerset, but warned of weak demand in the short term which may weigh on rental performance.

It added that stable revenue contribution from Sky Complex continues to mitigate downside risks during the Covid-19 pandemic.

Said Kelvin Chow, chief executive officer of the Reit manager: "We are encouraged by the improving signs seen in Singapore's retail sales and the moderation in the rate of economic contraction in fourth quarter 2020.

"While leasing may continue to remain challenging in the near term, we believe that 313@somerset, given its prime location, will continue to attract new prospects to showcase their brands in this youth-oriented mall."

The first distribution for FY2021 will be for the period July 1, 2020 to Dec 31, 2020, and will be paid on or before March 31, 2021.

Units of Lendlease Global Reit closed Wednesday up one Singapore cent or 1.28 per cent at 79 cents.