Lendlease Global Reit posts Q3 DPU of 1.28 S cents, 0.7% above IPO forecast

LENDLEASE Global Commercial Reit has posted a distribution per unit (DPU) of 1.28 Singapore cents for the third quarter ended March 31, 0.7 per cent higher than the manager's initial public offering (IPO) forecast of 1.27 cents.

Gross revenue stood at S$21.7 million for the quarter, up 2.2 per cent from the IPO forecast of S$21.2 million. This was mainly driven by rental income from 313@somerset and higher contributions from Sky Complex in Milan due to the pick-up in the euro against the Singapore dollar, the manager said in the Reit's financial results release on Tuesday.

Net property income was S$16.6 million, 4 per cent more than the IPO forecast of S$16 million, largely due to higher gross revenue and lower property operating expenses.

Distributable income to unitholders was at S$15 million, up 0.2 per cent from the IPO forecast of S$14.9 million.

No distribution has been declared for the period as the Reit intends to make distributions to unitholders on a semi-annual basis for every six-month period ending Dec 31 and June 30.

The manager said the rental relief provided to tenants affected by the Covid-19 pandemic will weigh on the Reit's performance in the coming quarters.

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The severity of the impact of Singapore's "circuit-breaker" measures on tenants' operations and income also cannot be determined at this point. Whether they can fulfil their rental obligations after the temporary relief period also remains uncertain.

Kelvin Chow, chief executive of the Reit's manager, said the measures implemented will inevitably affect footfall and tenant sales at 313@somerset.

"While the duration of the closures is uncertain, we remain committed to helping our tenants during this tough time. In the next few months, we will focus on managing operating expenses and adopting flexible leasing strategies to maintain occupancy," he added.

Sky Complex, meanwhile, is expected to remain resilient due to its triple-net lease structure which minimises operational costs and risks for the Reit. A single tenant fully occupies the property. 

"While the majority of the tenant's employees are working from home, broadcasting - without live audiences - is still taking place in the buildings," Mr Chow said. 

Lendlease Global Reit units were trading S$0.02 or 3.6 per cent higher at S$0.58 as at 9.22am on Tuesday, after the results were announced.