Lendlease Global Commercial Reit posts 10.4% retail rental reversion for Q3 FY2025
[SINGAPORE] Lendlease Global Commercial Real Estate Investment Trust (LReit) on Wednesday (May 7) posted a positive retail rental reversion of 10.4 per cent for the third quarter ended Mar 31, 2025, despite a 'softer' retail landscape.
The performance came even as it recorded a 0.2 per cent decline in visitation and a 5.1 per cent drop in tenant sales year-to-date. Both were affected by softer retail conditions, outbound tourism and weakness in sectors including shoes and bags, and fashion and accessories.
However, LReit's retail portfolio achieved a strong occupancy rate of 99.5 per cent and a healthy tenant retention rate by net lettable area (NLA) of 87.9 per cent, the manager said in a business update for Q3 FY2025.
During the quarter, the manager also signed a lease agreement with Shaw Theatres, welcoming the cinema chain as a new tenant to take over the space previously occupied by Cathay Cineplex.
It is currently in talks with Cathay Cineplex to recover the outstanding amount owed and will provide an update at an appropriate juncture, the manager said.
Additionally, the manager announced the onboarding of several new tenants, including Canadian athletic apparel brand lululemon, modern tea brand Chagee and Japanese thrift store chain 2nd Street.
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Office portfolio
LReit also achieved a positive rental uplift for its office portfolio, with occupancy in the office segment coming in at 86.6 per cent as at Mar 31, 2025.
By portfolio gross rental income (GRI), these tenants account for about 22 per cent, with a long portfolio weighted average lease expiry (Wale) of 11.4 years by NLA and 14.1 years by GRI.
The manager said that the trust also concluded a rent review for its Jem office in February, resulting in a positive uplift of about 13 per cent over the prevailing base rent. The new rent will take effect for a five-year term beginning Dec 3, 2024.
The office is fully leased to the Ministry of National Development until 2044.
In addition, the Reit completed asset enhancement works at the ground floor lobby of Building 3 at its Sky Complex property in Milan, Italy. The property had an occupancy rate of nearly 31 per cent as at Mar 31, 2025.
Overall performance
LReit's portfolio committed occupancy remained stable at 92.1 per cent as at Mar 31, 2025, its manager said. Its lease expiry profile remained well-spread, with only 1.2 per cent by NLA and 2.4 per cent by GRI due for renewal in FY2025.
The trust continued to maintain a long Wale of about 7.3 and 4.9 years by NLA and GRI, respectively.
In terms of capital management, it successfully refinanced S$200 million of 5.25 per cent perpetual securities during the quarter. This was achieved through a new issuance at a reduced coupon rate of 4.75 per cent, coupled with new loans at more favourable funding costs.
Managing the trust's capital position is a priority, noted Guy Cawthra, who joined the manager as chief executive officer effective Apr 1. He added that the Singapore portfolio, which comprises about 90 per cent of the total portfolio by valuation, has continued to see strong rental growth.
He noted: 'Looking ahead, despite uncertain capital markets, we shall pursue options for asset recycling, with the objective of reducing our gearing. We will also assess our strategy and formulate a strategic growth plan for communication to the investment community.'
Units of Lendlease Global Commercial Reit closed unchanged at S$0.515 on Wednesday, before the release of the business update.
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