Lendlease REIT to Acquire Remaining 30% Stake in PLQ Mall, Securing Full Ownership at S\$885 Million Valuation

Key Highlights

• Lendlease Global Commercial REIT (Lendlease REIT) to acquire the remaining 30% indirect stake in PLQ Mall, Singapore, for approximately S\$100.8 million.
• The acquisition brings Lendlease REIT’s ownership of PLQ Mall to 100%, consolidating control over the property and its trustee-manager.
• The agreed property value for PLQ Mall is S\$885 million, representing a 2.2% discount to the appraised value (S\$905 million).
• The deal is financed via an underwritten non-renounceable preferential offering to raise gross proceeds of S\$196.6 million through new unit issuance at S\$0.558 per unit.
• Transaction expected to be DPU (distribution per unit) accretive, with combined acquisition (including prior 70%) boosting DPU by 2.1% on a pro forma FY2025 basis.
• Post-acquisition, Lendlease REIT’s portfolio value will rise to S\$4.2 billion, with Singapore assets constituting ~90% of the portfolio.
• Pro forma gearing will be maintained at a prudent 37.6%, supporting future growth.

Detailed Acquisition Structure

• Lendlease REIT, through its trustee DBS Trustee Limited, has entered into three key agreements:
  • Unit Purchase Agreement (UPA) for the 30% stake in PLQM Trust (which indirectly owns PLQ Mall)
  • Sale & Purchase Agreement (TM SPA) for the trustee-manager
  • Sale & Purchase Agreement (LL PLQM 2 SPA) for 100% of LL PLQM 2 Pte. Ltd.
• The acquisition cost is approximately S\$100.8 million for the property interest, plus S\$12.9 million in transaction, equity raising, and debt refinancing costs, and S\$2.7 million as an acquisition fee to the manager (paid in units), totaling an estimated S\$116.4 million.
• Completion is targeted by 30 June 2026.

Key Investment Rationale and Strategic Benefits

1. Attractive Valuation and Yield: The acquisition price is at a 2.2% discount to independent valuations by Knight Frank and CBRE. The implied net property income (NPI) yield is 4.5%, which is competitive versus recent suburban retail mall transactions and matches the earlier 70% stake acquisition in November 2025.
2. Strengthened Singapore Focus: With full ownership of PLQ Mall, Lendlease REIT’s portfolio will be 90% Singapore-based, enhancing income stability and diversification. Total portfolio value expands to S\$4.2 billion.
3. Operational and Financial Flexibility: Full control enables active asset management, refinancing of existing borrowings (with ~S\$2 million in annual debt cost savings expected), and optimisation of tenant mix and enhancement works.
4. Prime Location & Demographics: PLQ Mall is strategically located at Paya Lebar MRT interchange and close to several expressways, boosting accessibility and catchment. The surrounding area is expected to see significant population growth and new residential supply by 2030, supporting long-term retail demand.
5. Sustainability Leadership: PLQ Mall holds BCA Green Mark Platinum certification, reinforcing Lendlease REIT’s ESG credentials. All Singapore assets will be Green Mark Platinum, and Milan assets are LEED Gold certified.
6. DPU Accretion & Financial Impact: The combined acquisition (100% of PLQ Mall) is forecast to increase DPU by 2.1% (FY2025 pro forma). Gearing remains conservative at 37.6% post-transaction.

Property Details: PLQ Mall

• Location: 10 & 2 Paya Lebar Road, Singapore
• Gross Floor Area (GFA): 463,484 sq ft
• Net Lettable Area (NLA): 317,350 sq ft
• Committed Occupancy: 99.4%
• Key Tenants: Haidilao, Uniqlo, Shaw Theatres, Starbucks Reserve
• Tenure: 99-year leasehold from 2015 (~88 years remaining)
• Valuation (Jan 2026): Knight Frank: S\$904m, CBRE: S\$906m, Average: S\$905m
• Agreed Value: S\$885m (S\$2,789 psf NLA)
• NPI (2026): S\$39.5 million
• NPI Yield (2026): 4.5%

Financial Effects & Shareholder Impact

• Pro Forma DPU: Combined acquisition boosts DPU from 3.47 to 3.54 cents (+2.1%), based on FY2025 adjusted figures.
• Pro Forma NAV per Unit: Adjusted post-acquisition NAV per unit is S\$0.70 (down from S\$0.72 pre-acquisition, due to unit issuance).
• Pro Forma Gearing: Reduced to 37.6% post-completion, from 38.1% pre-acquisition.

Regulatory and Transaction Structure Notes

• The acquisition is an “interested person transaction” because the seller is a wholly-owned subsidiary of Lendlease Corporation Limited, the REIT’s sponsor and controlling unitholder (holding ~21% of units).
• Transaction value (S\$100.8m) is 4.7% of latest audited NTA and, when aggregated with related party transactions in the current financial year, remains below the 5% threshold; thus, unitholder approval is NOT required but the transaction is subject to immediate disclosure.
• Relative size of the acquisition is 8.0% of NPI and 5.7% of market capitalisation, classifying this as a “discloseable acquisition” under SGX rules.
• The acquisition fee to the manager will be paid in units, subject to a one-year moratorium on sale as required by regulations.

Key Price-Sensitive Considerations for Shareholders

• Full control over PLQ Mall could unlock further value through asset enhancement initiatives and refinancing, leading to improved returns and income stability.
• DPU accretion and a conservative gearing level post-acquisition may support a positive rerating of the REIT, especially given the competitive entry yield and Singapore focus.
• Discount to valuation (S\$20 million or 2.2%) on a high-quality asset in a growth location is likely to be viewed positively by the market.

Completion and Next Steps

• Acquisition completion is expected by 30 June 2026.
• Inspection of transaction documents and valuation reports is available at the manager’s office for three months from the announcement date, by appointment.

Conclusion

The acquisition of the remaining 30% stake in PLQ Mall, making Lendlease REIT its sole owner, is a significant and potentially price-sensitive development. It solidifies Lendlease REIT’s strategic focus on prime Singapore retail assets, promises improved income stability, and is expected to deliver DPU accretion while maintaining prudent leverage. The transaction’s competitive pricing, growth prospects, and operational flexibility are likely to be well-received by investors.

Disclaimer: This article is prepared for informational purposes only and does not constitute investment advice. Investors should consider their own circumstances and consult their financial advisors before making investment decisions. The information contained herein is based on publicly available disclosures and may be subject to change. Neither the author nor this publication guarantees the accuracy, completeness, or timeliness of the information provided. Past performance is not indicative of future results. Investing in REITs carries risks, including loss of principal.

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