Lendlease Global Commercial REIT released its 1HFY2026 a couple of weeks ago.
So far, this Singapore REIT maintains a diversified portfolio focused on stabilized, income-producing retail and office properties. 90% of LREIT’s portfolio is located in Singapore, with the remaining in Italy.
Today, this Singapore REIT has added two more properties, Jem Mall and PLQ Mall.
Here’s 5 things you should know about Lendlease Global Commercial REIT’s latest financial results.
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1. Lendlease Global Commercial REIT’s portfolio is shifting towards retail
In November 2025, Lendlease Global Commercial sold off Jem office to Keppel REIT for S$462 million. It was also around this time the major Singapore REIT subsequently acquired a 70% interest in PLQ Mall, attempting to increase exposure to suburban retail.
Earlier this year, Lendlease REIT said it will buy over the remaining 30%-stake in PLQ Mall owned by its sponsor.
Lendlease REIT’s malls are more focused on serving residential areas closer to the MRT stations, with emphasis on necessities and essential spending and anchor tenants such as supermarkets.
2. Net property income fell by 1.2% to S$74 million
During its latest first half financial year results, Lendlease REIT reported lower gross revenue, which was down 1.6% to S$102 million.
Net property income stood at S$74.0 million, which was 1.2% lower compared to the year before. And weighted average lease expiry was reported as 4.8 years.
At first glance, the slight drop in revenue and net property income might appear disappointing. However, the decline was largely due to the divestment in Jem Office, dragging its revenue and net property income.
Operationally, the underlying retail assets remained resilient, with a steady rental reversion and occupancy rate.
One notable operational issue during the period was the vacancy created by Cathay Cineplexes exiting its space.
However, the space has already been backfilled by Shaw Theatres, which should gradually restore rental contribution going forward.
While the REIT’s revenue and net property income dipped slightly due to asset divestment, the underlying leasing metrics suggest Lendlease REIT’s retail portfolio continues to show stable demand and pricing power.
3. Positive rental reversions and tenant sales
Tenant sales grew 7.2% y/y during the first half of FY2026. The increase reflects inclusion of PLQ Mall, which contributed one month of results following Lendlease REIT’s acquisition of its 70% stake in the asset in November 2025.
The addition of PLQ Mall expanded the REIT’s exposure to suburban retail, which benefits from stable day-to-day consumer spending.
However, if we exclude PLQ Mall, tenant sales still grew 1.1% y/y, indicating shopper spending across Lendlease REIT’s existing malls remains resilient.
Meanwhile, shopper traffic rose 6.2% on a like-for-like basis, suggesting footfall recovery and marketing initiatives are continuing to drive engagement across the portfolio.
So far, Lendlease REIT achieved a positive retail rental reversion of 10.4%, meaning newly signed leases were on average more than 10% previously signed leases.
Thus, we can expect the higher rental reversions to impact net property income given the costs associated with property are often predictable and not as variable as other businesses.
4. Strong occupancy rate
Lendlease REIT’s retail portfolio’s occupancy remained healthy at 99.5%, close to full occupancy. These include assets like Jem at 99.9%, 313@somerset at 98.8%, and PLQ Mall at 99.4%.
We also see a recovery in the retail sector, with year to date visitation and tenant sales growing 9.6% y/y and 7.2% y/y respectively, including one month of contribution from PLQ Mall.
However, occupancy rates for Lendlease’s office spaces declined slightly from 91.5% to 89.1%. While not great, Lendlease’s office space accounts for a much smaller amount of Lendlease’s total portfolio.
5. Lendlease REIT’s capital management improving
Lendlease REIT’’s sale of Jem office boosted its balance sheet because net sales proceeds were used to repay borrowings.
As a result, even though total assets shrank from S$3.9 billion to S$3.6 billion, liabilities also fell from S$ 1.7 billion to S$ 1.2 billion.
Overall, Lendlease’s debt situation has improved. Its gearing ratio improved to 38.4% against 42.7%, from a quarter ago.
However, its interest coverage ratio is at ~1.8x, still higher than MAS’s regulatory requirement 1.5x.
The reason its interest coverage ratio is low is because Lendlease has a shorter weighted average debt maturity of 2.5 years, which results in a higher interest cost.
Given interest rates are expected to decline, I believe Lendlease REIT will be able to refinance its debt at lower cost of debt.
Right now, Lendlease’s weighted average cost of debt is 2.9%, with 72% of its outstanding debt being fixed rates.
My final thoughts
I personally like the management’s decision to optimize its portfolio by moving away from office spaces and increasing exposure to retail malls.
We definitely see the benefits of it as rental reversions are positive and occupancy rates are strong.
Sometimes, investing can be simple.
Willie Keng, CFA
Founder, Dividend Titan
