Lendlease Reit posts 99.9% occupancy; 313@somerset tenant sales close to 2020 levels

THE manager of Lendlease Global Commercial Reit : JYEU 0% (real estate investment trust) on Thursday (May 5) said that portfolio occupancy for the third quarter ended Mar 31 remained high at 99.9 per cent. (*see amendment note)

Tenant sales year-to-date for its 313@somerset mall have also recovered close to FY2020 levels, the manager said in a business update.

Weighted average lease expiry (WALE) by net lettable area (NLA) stood at 8.2 years and 4.3 years by gross rental income (GRI). Moreover, the manager said it “substantially de-risked” leases expiring for the year to 1 per cent by NLA and 3 per cent by GRI.

With the completed acquisition of Lendlease Reit's 100 per cent interest in Jem, the manager expects the Reit’s WALE to increase to 8.7 years. Its exposure to the suburban retail sector will also expand significantly to about 47 per cent.

For the third quarter, 313@somerset maintained an occupancy rate of 99.4 per cent with a tenant retention rate of 71.1 per cent as at Mar 31. This was mainly due to positive leasing momentum and the manager’s “proactive leasing strategy”.

The manager expects 313@somerset to benefit from the reopening trajectory, amid the resumption of social activities and the launch of the Vaccinated Travel Framework, anticipated to bring tourists back to Singapore.

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Meanwhile, the 3 office buildings of Sky Complex are fully leased until 2032. The manager does not expect rising energy costs and inflation to impact the Milan development as the buildings operate on a triple-net lease structure with annual rental escalation pegged to the consumer price index.

Lendlease Reit units closed 1.3 per cent or S$0.01 lower at S$0.785 on Wednesday.

*Amendment note: A previous version of this story incorrectly reported that Lendlease Reit's business update was for Q1 2022 when it is in fact Q3 2022.