Singapore: Lendlease Global Commercial REIT (LREIT) reported a positive rental reversion of 10.4 per cent for its retail portfolio in the third quarter (Q3) ended March 31, 2025, with a healthy tenant retention rate of 87.9 per cent by net lettable area (NLA), despite a softer retail climate.
According to BERNAMA News Agency, LREIT stated that visitation declined by 0.2 per cent, and tenant sales fell 5.1 per cent year-to-date, pressured by outbound tourism and weaker demand in discretionary segments such as shoes, fashion, and sporting goods.
LREIT's retail assets showed resilience with a portfolio occupancy of 99.5 per cent. The overall portfolio occupancy remained stable at 92.1 per cent, with a long portfolio weighted average lease expiry (WALE) of 7.3 years by NLA and 4.9 years by gross rental income (GRI).
The LREIT's Jem office property achieved a 13 per cent rental uplift following a rent review effective December 3, 2024. The building remains fully leased to Singapore's Ministry of National Development through 2044. Office occupancy stood at 86.6 per cent as of March 31, with the segment accounting for approximately 22 per cent of total GRI.
Chief executive officer Guy Cawthra noted that the Singapore portfolio accounts for roughly 90 per cent of total valuation and continues to anchor LREIT's income. The company will assess asset recycling opportunities and outline a forward growth plan to the market.
On the capital front, LREIT successfully refinanced SG$200 million in perpetual securities due April 2025, issuing SG$120 million at a lower 4.75 per cent coupon and funding the remainder through new loans. This move reduced borrowing costs and brought gearing down to 38.0 per cent. (SG$1 = RM3.28)
Leasing activity remained active, highlighted by the signing of Shaw Theatres at Jem, replacing Cathay Cineplex's space. New entrants such as lululemon, Chagee, and Japanese thrift brand 2nd Street enhanced the tenant mix. Negotiations with Cathay regarding outstanding receivables are ongoing.
LREIT continued to enhance its asset base with the completion of ground floor lobby upgrades at Building 3 in Milan, offering a more modern and tenant-friendly environment.
Upgrades to restrooms at Jem are underway, targeting phased completion by the first quarter of 2026. Meanwhile, redevelopment of a 48,200-square-foot car park at Grange Road into a multifunctional event space is progressing on schedule, with piling works expected to complete by end-2025.
