Lendlease Global Commercial REIT: 1H FY2026 Financial Analysis and Investor Outlook
Lendlease Global Commercial REIT (Lendlease REIT) released its 1H FY2026 financial results, highlighting a period of active portfolio management, resilient operational performance, and steps toward sustainable growth. This article summarizes the key findings and provides an investor-focused perspective on the REIT’s outlook.
Key Financial Metrics and Performance Table
| Metric |
1H FY2026 |
2H FY2025 |
1H FY2025 |
YoY Change |
QoQ Change |
| Gross Revenue (‘000) |
S\$101,929 |
– |
S\$103,594 |
-1.6% |
N/A |
| Net Property Income (‘000) |
S\$74,027 |
– |
S\$74,916 |
-1.2% |
N/A |
| Distributable Income (‘000) |
S\$48,590 |
– |
S\$43,492 |
+11.7% |
N/A |
| DPU (cents) |
1.85 |
1.80 |
1.80 |
+3.1% |
+2.8% |
| Gearing Ratio |
38.4% |
42.7% |
– |
N/A |
-4.3 pp |
| Interest Coverage Ratio (ICR) |
1.8x |
1.6x |
– |
N/A |
+0.2x |
Dividend Trends
The 1H FY2026 DPU increased 3.1% YoY to 1.85 cents, from 1.80 cents in both 2H FY2025 and 1H FY2025. This growth was supported by resilient Singapore retail performance and refinancing initiatives that lowered capital costs. An advanced distribution of 1.33 cents was paid for the period 1 July to 13 November 2025, with a further 0.52 cents for the remainder of 1H FY2026.
Historical Performance Trends
- Tenant Sales: Up 7.2% YoY in 1H FY2026, or 1.1% YoY on a like-for-like basis excluding PLQ Mall.
- Retail Rental Reversion: Achieved a positive reversion of 10.4% in 1H FY2026, indicating improved leasing terms for new/renewed tenants.
- Occupancy: Portfolio committed occupancy remained strong at 94.9% as at 31 December 2025, with retail occupancy near 100%.
- Gearing and ICR: Gearing fell to 38.4% from 42.7% in the previous quarter, and ICR improved to 1.8x from 1.6x, reflecting improved balance sheet strength.
Asset Reconfiguration, Divestments, and Acquisitions
- Jem Office Divestment: The REIT completed the divestment of Jem office in November 2025, unlocking value and using proceeds to reduce gearing and strengthen the capital structure.
- PLQ Mall Acquisition: In November 2025, Lendlease REIT acquired a 70% interest in PLQ Mall, increasing Singapore exposure to ~90% of portfolio value and enhancing its suburban retail position.
- Potential for Further Acquisitions: The REIT retains a clear pathway to acquire the remaining 30% of PLQ Mall and continues to evaluate divestment opportunities for Building 3 in Milan.
Capital Management and Fundraising
- Private Placement: Increase in units in issue to 2,961,010,783 (from 2,446,669,290) was primarily due to a private placement for the PLQ Mall acquisition.
- Perpetual Securities Refinancing: In April 2025, the REIT refinanced S\$200 million in perpetual securities with S\$120 million of new issuance at a lower coupon rate and additional loans at lower cost, improving ICR.
- Debt Profile: Weighted average cost of debt lowered to 2.90%. Debt maturity is diversified, with no refinancing risk in FY2026 and 93% of debt facilities sustainability-linked.
Operational and Market Developments
- Tenant Mix and Mall Initiatives: The REIT actively refreshed its tenant mix, securing new F&B and experiential tenants, and ran seasonal marketing campaigns to boost footfall and sales.
- Market Context: Singapore’s retail market saw a 5.8% YoY rise in sales (ex-motor vehicles) and continued tourism recovery. Retail leasing remained healthy, with prime rents rising and continued demand from F&B and beauty sectors. Milan’s office market, while seeing a rebound in investment volumes, experienced softer leasing and a shift toward smaller spaces.
Remuneration and Related-Party Transactions
No specific disclosure on directors’ remuneration or related-party transactions was provided in the report.
Forecasted Events and Strategic Priorities
- Continue to focus on active capital management, sustainable income growth, and portfolio optimization.
- Drive retail rents through active asset management and new tenancies.
- Complete reconfiguration works at PLQ Mall and construction of a multifunctional event space at Somerset (expected completion 2H 2026).
- Continue to lease up Milan’s Building 3 and evaluate divestment possibilities.
Conclusion and Investment Recommendations
Overall Assessment: Lendlease REIT’s 1H FY2026 performance demonstrates resilience—despite lower headline revenue and NPI due to asset recycling, distributable income and DPU rose on the back of careful capital management and accretive acquisitions. The Singapore-focused strategy, enhanced portfolio quality, strong occupancy, and improved leverage and ICR collectively present a stable and attractive profile for income-focused investors.
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If you are currently holding Lendlease REIT: The REIT’s fundamentals have strengthened, with DPU growth, lowered gearing, and a clear path for further value creation through portfolio optimization and asset enhancements. Continuing to hold is recommended, especially if you favor stable income and exposure to resilient Singapore retail.
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If you are not holding Lendlease REIT: The current environment of rising retail sales, strong portfolio occupancy, and active capital management make Lendlease REIT a candidate for consideration, especially for those seeking exposure to the Singapore suburban retail market. However, be aware of the risks tied to broader economic conditions and retail sector challenges.
Disclaimer: The above does not constitute investment advice. All recommendations are based strictly on the company’s latest published results. Investors should consider their own financial circumstances and consult a licensed adviser before making investment decisions.
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