Lendlease Global Commercial REIT (LREIT) has reported a 1.8% year-on-year increase in its distribution per unit (DPU) for the second half of the financial year 2025, despite a S$2 million provision for outstanding rental from Cathay Cineplexes. The REIT, which invests in stabilised income-producing properties globally, is sharpening its competitive edge by concentrating on its Singapore portfolio, which constitutes 87% of its total valuation, a UOB Kay Hian report said.
The REIT’s properties, including 313@Somerset and Jem in Singapore, maintained high occupancy rates of 98.8% and 99.8% respectively. LREIT achieved a positive rental reversion of 10.2% for FY25, with tenant retention at 83.3%. The REIT’s strategy includes enhancing tenant mix and introducing new food and beverage offerings to boost shopper traffic.
LREIT’s new CEO plans to continue asset recycling to reduce gearing, with a significant divestment of Jem’s office component expected to complete in the second quarter of FY26. This move is anticipated to reduce the REIT’s aggregate leverage from 42.6% to 35%.
The REIT’s portfolio valuation increased by 2.2%, driven by growth at Jem and the strength of the euro. The valuation for Jem in Singapore and Sky Complex in Milan, Italy, rose by 2% and 8.7% respectively. LREIT also recognised a gain in the fair value of investment properties amounting to S$46.8 million.
Looking ahead, LREIT aims to enhance its Singapore assets further, with plans for a purpose-built music hall at 313@Somerset expected to attract more visitors. UOB Kay Hian maintains a ‘Buy’ recommendation with a target price of S$0.79, supported by a distribution yield of 6.7% for FY26.
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