Distributable income reached $56 million in 1HFY2023, up 95.9% year over year

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Lendlease Global Commercial REIT (LREIT) has announced an increase in distributable income in the range of 95.9% y-o-y to $56 million for its 1HFY2023 that ended in December, which translates to an average in the range of 2.45 cents.

The revenue from the period nearly tripled up to $101.7 million, primarily through Jem’s acquisition in Jem in the month of April 2022 as well as the improved performance of 313@Somerset’s operating department. This resulted in a higher income from net property earnings of $76.4 million in 1HFY2023.

At December 31, 2022, LREIT’s total borrowings were $1.45 billion, with the ratio of gearing 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. This was accompanied by the weighted average expense at 2.35% per annum. LREIT is a company with an interest-coverage ratio that is 5.5 times.

LREIT’s portfolio’s committed occupancy stood in 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 that expire in the year were reduced up to 5.9% from 8% earlier through NLA in addition to 9.6% from 14.5% earlier by GRI.

The Retail portfolio’s operating rate was at 99.5% as at Dec 31st, 2022. This was accompanied by positive retail rental reversion of around 2%.

As of the time of the closing at the end of the period, tenant sales and visits surpassed the pre-Covid-19 average levels, rising by five percent and 2.8 times per year, respectively in 1HFY2023.

The retail portfolio boasts good tenant retention rates at 72.4% with essential services comprising the bulk of transactions at around 58% according to GRI.

In addition, the office portfolio of LREIT reported a positive increase in rental growth about 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 and sales from tenants for the retailer properties,” says CEO of the manager Kelvin Chow.

Units of LREIT ended the day at an unchanged 73.5 cents on February 7.