Lendlease Real Estate Investment Trust Returns Are Better than Estimated

One of the main reasons that buyers of Lendlease REITs can cheer is that the turns of the investment trust outperforms its own estimate in the latest results that are available and conveyed to the shareholders. Initially, the estimate return is at 1.25 cents but now the returns of the share is at 1.29 cents indicating that there is a 3.1% increase compared to estimates. Distributable income to unitholders of $15 million is 2.4% higher than the estimate forecast previously and was attributed to higher net property income from real estate portfolios and lower finance costs for its currentl holdings. Some of the better investments are core city centre developments. Please see Midtown Gardens Location at Bugis by Guocoland.

Some of the returns can be attributed to 313@someret which is performs better than estimated. 313@somerset registered positive rental reversion of 0.5% for the period of Oct to Dec 2019. The site’s plot ratio has been revised from 4.9+ to 5.6 under the 2019 Master Plan and therefore this would mean that there is a higher chance for a enbloc and the development is sitting on a positive return which means in a potential increase of up to 10,850 sq ft of gross floor area. The manger is studying opportunities to deploy the additional floor space to improve the retail offering.

Singapore’s retail market outlook is encouraging despite the recent corona virus scare as there is a limited supply over the short term and the tightening vacancy environment will support modest rental growth. The open-air carpark on Grange Road beside 313@somerset could also be transformed into a dedicated event space as part of government rejuvenation plans along Orchard Road and this also would mean more traffic for 313 @ Somerset and therefore more sales in the retail component for the short owners.

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