Lendlease Global Commercial REIT has reported a 1.8% year-on-year increase in its distribution per unit (DPU) for the second half of the financial year 2025, reaching 1.80 pence. This growth is attributed to a more favourable interest rate outlook and positive rental growth across its portfolio. The REIT’s manager has also announced the divestment of the Jem office for S$462.0 million, a move expected to bolster the REIT’s capital structure and reduce its leverage.
The divestment of the Jem office is set to reduce Lendlease REIT’s aggregate leverage from 42.6% to approximately 35% on a proforma basis, providing improved financial flexibility for future growth. The transaction aligns with the valuation and is part of the REIT’s strategy to optimise its portfolio.
Financially, Lendlease REIT experienced a 6.5% decrease in gross revenue and a 10.0% drop in net property income for FY2025, primarily due to the upfront recognition of supplementary rent from the Sky Complex lease restructuring in FY2024. However, after adjustments, gross revenue and net property income showed a slight increase year-on-year.
Operationally, the REIT’s portfolio saw a 2.2% increase in valuation, driven by a positive outlook for its Singapore assets. The retail portfolio maintained a strong occupancy rate of over 99%, with a positive rental reversion of 10.23%. In Milan, commercial Buildings 1 and 2 achieved a 17.4% rental uplift due to annual rental escalation.
CEO Guy Cawthra highlighted the significance of the Jem office divestment, stating, “The divestment of Jem Office marks an important milestone in reducing our leverage, strengthening our capital structure, and reducing our interest expense.”
Looking ahead, Lendlease REIT’s core Singapore portfolio, including 313@somerset and Jem, is expected to continue delivering robust operational performance, supported by a favourable interest rate environment. Unitholders can anticipate receiving their distribution on 24 September 2025.
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