Lendlease REIT completed the acquisition of 30% interest in PLQ Mall on March 26 achieving full ownership of the asset. AEI are currently underway, with completion targeted by end 2026 positioning PLQ Mall to better capture evolving consumer demand and meet retailers’ operational requirements. Upon completion, the reconfigured spaces are expected to support higher rental rates and strengthen Lendlease REIT’s income profile. Following the acquisition, the Manager has also completed the refinancing of the PLQ Mall loans, securing approximately $2 million in annual all in debt cost savings in line with acquisition underwriting.
As of March 31, Lendlease REIT’s portfolio committed occupancy improved to 95.3%. Its retail portfolio achieved 99.7% occupancy while occupancy at the Milan office portfolio stood at 89.1%. Portfolio weighted average lease expiry was 4.7 years by net lettable area (NLA) and 3.7 years by gross rental income (GRI). Approximately 6.3% of the NLA is due for renewal in FY2026, representing 4.6% of the GRI. Contracted electricity tariffs at fixed rate till FY2028 will shield Lendlease REIT from downside risks of potential rate increases impacted by higher oil prices.
Lendlease REIT’s retail portfolio recorded a positive rental reversion of 12.2% as of March 31. On a year to date basis, tenant sales and shopper visitation grew by 17.6% y-o-y and 13.7% y-o-y respectively, incorporating four months of contribution from PLQ Mall. On a like for like basis excluding PLQ Mall, tenant sales and visitation also grew by 2.5% y-o-y and 5.2% y-o-y respectively. Tenant retention for the retail portfolio stood at 62.5% as at March 31, primarily due to the exit of Cathay Cineplexes. The space has since been backfilled by Shaw Theatres, maintaining the mall’s entertainment offering. Excluding Cathay Cineplexes, tenant retention would have been 72.9%.
As at Mar 31 Lendlease REIT’s gross borrowings were $1,737.3 million, including PLQ Mall loans that are now consolidated following its full ownership. Post quarter-end, $82.8 million of the proceeds reduced aggregate leverage to 37.5% on a proforma basis compared to 38.7% as at March 31. The weighted average cost of debt remained stable at approximately 2.9% per annum, while the interest coverage ratio (ICR), based on Lendlease REIT’s last reported financial results as at Dec 31 2025, stood at 1.8 times. On April 14, the Manager issued $120 million of perpetual securities at 4.28% per annum to partially refinance an upcoming $200 million perpetual securities due in June 2026. Management is monitoring market conditions and will evaluate refinancing strategies for the remaining $80 million, either through existing debt capacity or further issuance of perpetual securities
