REIT-TIREMENT - REITs Investing & Personal Finance

REITs investing & personal finance

Tuesday, August 22, 2023

Lendlease Global Commercial REIT Review @ 22 August 2023

Basic Profile & Key Statistics
  • Main Sector(s): Retail & Office
  • Country(s) with Assets: Singapore, Italy
  • No. of Properties (exclude associate/fund): 3

Key Indicators

Performance Highlight
Gross revenue, NPI and distributable income improved YoY mainly due to the acquisition of Jem in Apr 2022 and the easing of COVID-19 measures in 2022. Despite that, DPU has declined mainly due to higher finance costs.

Tenant Sales & Visitation
Both tenant sales and visitation improved YoY.

Rental Reversion/Escalation
Both retail and office achieve positive rental reversion/escalation.

In June, LREIT acquired 10% stake in Parkway Parade Partnership Pte. Ltd. which indirectly owning 77.09% of the total share value of the strata lots in Parkway Parade. 

For the redevelopment of the Grange Road carpark into a multifunctional event space, no detail on the timeline is provided at this moment.

Related Parties Shareholding

  • REIT Sponsor's Shareholding: ± 10% from median
  • REIT Manager's Shareholding: Above median by 20% or more
  • Directors of REIT Manager's Shareholding: Above median by 20% or more

Lease Profile

  • Committed Occupancy: ± 5% from median
  • WALE: Above median by 20% or more
  • Highest Lease Expiry within 5 Years: Below median by 20% or more; Falls in FY2028, without breakdown
  • Weighted Average Land Lease Expiry: Above median by 20% or more

Debt Profile

  • Gearing Ratio: ± 10% from median
  • Gearing Ratio including Perps: Above median by 20% or more
  • Cost of Debt: Below median by 20% or more
  • Fixed Rate Debt %: Below median by 10% or more
  • Unsecured Debt %: 100%
  • WADM: Below median by 20% or more
  • Highest Debt Maturity within 5 Years: Below median by 20% or more; Falls in FY2024
  • Interest Coverage Ratio: Below median by 20% or more

Diversification Profile

  • Top Geographical Contribution: Above median by 20% or more
  • Top Property Contribution: Above  median by 20% or more
  • Top 5 Properties' Contribution: Above median by 20% or more
  • Top Tenant Contribution: Above median by 20% or more
  • Top 10 Tenants' Contribution: Above median by 10% or more

Key Financial Metrics

  • Property Yield: Below median by 10% or more
  • Management Fees over Operating Distributable Income: Above median by 20% or more; $4.59 distribution for every dollar paid 
  • Operating Distributable Income on Capital: Below median by 20% or more
  • Operating Distributable Income Margin: ± 10% from median
  • Operating Distribution Proportion: Below median by 10% or more

DPU Breakdown

  • TTM DPU Breakdown
    • 77.8% from Operation
    • 22.2% from Management Fees Paid in Units


  • Flat: Committed Occupancy
  • Slight Downtrend: DPU from Operation, Property Yield
  • Downtrend: NAV per Unit, Interest Coverage Ratio, Operating Distributable Income on Capital, Operating Distributable Income Margin

Relative Valuation

  • Dividend Yield: Above +2SD for 1y, 3y & 5y
  • P/NAV: Below-2SD for 1y & 3y; Below -1SD for 5y

Author's Opinion

 Favorable Less Favorable
Diversified SectorHigh Perpetual Securities %
High REIT Manager's ShareholdingLow Fixed Rate Debt %
High Directors of REIT Manager's ShareholdingShort WADM
High Committed Occupancy Low Interest Coverage Ratio
Long WALEHigh Top Geographical Contribution
Long Weighted Average Land Lease ExpiryHigh Top Property & Top 5 Properties' Contributions
Low Cost of DebtHigh Top Tenant & Top 10 Tenants' Contributions
100% Unsecured DebtLow Property Yield
Well Spread Debt MaturityNon Competitive Management Fees
 Low Operating Distributable Income on Capital
 Low Operating Distribution Proportion
 NAV per Unit Downtrend
 Interest Coverage Ratio Downtrend
 Operating Distributable Income on Capital Downtrend
 Operating Distributable Income Margin Downtrend

As compared to the previous 6 months, gross revenue and NPI have improved. However, distributable income and DPU are lower due to higher finance expenses and trust expenses. Regarding debt, the fixed rate debt is relatively low at 61% and there is a 27% debt maturity in FY2024, in which the manager has obtained a €300 million unsecured 5-year sustainability-linked loan facility to refinance it. 

For more information, check out:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and details of Singapore REIT

REIT Review - List of previous REIT review posts

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*Disclaimer: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my findings and should not be considered professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decisions.

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