Yesterday, I was shopping at Parkway Parade and found that it has a new food corner. The renovated area caught my attention as it seems that yesterday was the first opening day of some of the stores. The new stores carry popular brands like dal.komm coffee, Saboten + Tagosaku , Pepper Lunch and the bubble tea joint KOI.
Little known to many, Lendlease REIT acquired a 10.0% interest in Parkway Parade Partnership Pte Ltd, which indirectly holds 77.09% of the share value in Parkway Parade, from Lendlease Asia Investments Pty Limited in June 2023.
If you are not familiar with Parkway Parade, the suburban mall is conveniently located approximately eight kilometres to the east of Singapore’s Central Business District in Marine Parade. Parkway Parade is one of Singapore’s first major and biggest suburban malls, offering the largest range of stores on the East Coast of Singapore with over 250 stores located across seven levels.
Asset Enhancement Initiatives (“AEI”), have been planned to coincide with the completion of the new MRT station. This explains the new Food and Beverages offerings. Upon completion of AEI, Parkway Parade will be reinvigorated with new retail and F&B tenants.
As an investor, I am keen to know how Lendlease REIT is performing and whether should I invest in it?
Lendlease Global Commercial REIT’s Portfolio
Lendlease Global Commercial REIT (“LREIT”) portfolio comprises a leasehold interest in two properties located in Singapore and three freehold office properties located in Milan with a total appraised value of S$3.6 billion.
- Jem, an office and retail property in Singapore.
- 313@somerset, a prime retail mall in Singapore.
- Sky Complex, three Grade A office buildings in Milan.
If you wonder where is Parkway Parade in the portfolio, the suburban mall is considered under other investments under LREIT’s investment into Parkway Parade Partnership Pte Ltd.
As of 31st March 2023, LREIT has a gearing ratio of 39.3% with a Weighted average debt maturity of 2.3 years. LREIT has a total gross borrowings of S$1,454.4 million.
LREIT had obtained a €300 million unsecured 5-year sustainability-linked loan facility to refinance its Euro loan due in FY2024. Thus, there is no refinancing risks till FY2025.
Approximately 61% of the borrowings are hedged to fixed rates to mitigate against sudden interest rate hikes.
LREIT’s overall portfolio occupancy stood at a high of 99.8%.
Current Dividend Yield
Based on LREIT’s share price of S$0.68 and FY22 full year Distribution Per Unit (DPU) of 4.85 cents, this translate to a current dividend yield of 7.13%.
Since listing, LREIT was able to grow its DPU year-on-year.
Summary of Parkway Parade New Food Corner
Lendlease Global Commercial REIT (SGX:JYEU) will be releasing its FY23 full year financial results on Monday, 7th August 2023. It will be interesting to see if it can continue to grow its Distribution Per Unit (DPU) year on year.
I like Parkway Parade for its niche suburban location. It is one of my favourite malls when I was a child.
I believe LREIT’s investment into Parkway Parade can act as a catalyst to its performance when AEI and new MRT line is completed.