Implications for LREIT and Similar REITs:

Positive Tailwinds:

• 
  
  Lower interest rates in Europe  may  reduce financing costs  for assets like LREIT&rsquo s  Sky Complex in Milan
• 
  
  Could  ease valuation pressure  on European commercial real estate and  support cap rates
• 
  
  Disinflation in Europe  reduces cost pressures for tenants, potentially aiding  occupancy and rental stability

Ongoing Risks:

• 
  
  Weak eurozone growth  means  limited demand for office space, which is relevant for the  underperforming Sky Complex  (currently ~31% occupancy)
• 
  
  Trade war and tariffs  could hit  tenant sentiment and expansion plans, especially for global tenants in Milan
• 
  
  Currency risk: a stronger euro might pressure LREIT&rsquo s SGD-reported earnings unless hedged effectively

Conclusion:

Lendlease Global Commercial REIT reports portfolio occupancy of 92.1% as at end March

Lendlease Global Commercial REIT (LREIT) has reported a portfolio committed occupancy of 92.1% as at March 31, 2025.

The REIT&rsquo s retail portfolio received a 99.5% occupancy with a positive rental reversion of 10.4% as at March 31. Its office portfolio occupancy stood at 86.6%.

LREIT reported a weighted average lease expiry (WALE) of approximately 7.3 years (by NLA) and 4.9 years (by GRI) respectively.

The REIT&rsquo s gross borrowings as at March 31 came in at $1.5 billion, down from the $1.57 billion reported in the previous quarter.

Gearing ratio stood at 38%, and weighted average debt maturity at 1.8 years.

The REIT&rsquo s fixed rate borrowings came in at 76% as at March 31, and interest coverage ratio (ICR) was 1.5 times.

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The REIT issued $120 million perpetual securities at 4.75% per annum for the refinancing of the $200 million 5.25% perpetual securities due in April 2025, with the remaining $80 million to be refinanced with loans.

Net proceeds from the $120 million issuance were utilised to reduce debt borrowings, lowering gearing to 38.0% as at March 31, 2025. In April 2025, debt was drawn to repay the $200 million perpetual securities.

The REIT says that it aims to improve its ICR by active asset management, managing the cost of capital, and asset recycling.

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During the quarter, the manager signed a lease agreement with Shaw Theatres as a new tenant. It has commenced refurbishment works to upgrade restroom facilities at Jem, scheduled for completion in 1Q2026.

The REIT completed the rental review exercise for Jem office in February, with a positive uplift of about 13% over the prevailing base rent for five years effective from Dec 3, 2024. Jem' s office is fully leased to Singapore' s Ministry of National Development (MND) until 2044.

As of March 31, 2025, Building 3 in Milan had an occupancy rate of approximately 31%.

The REIT&rsquo s portfolio comprises leasehold properties in Singapore namely Jem (an office and retail property) and 313@somerset (a prime retail property) as well as freehold interest in Sky Complex (three Grade A commercial buildings) in Milan.

Units in Lendlease closed flat at 51.5 cents on May 7