Lendlease Global Commercial Trust Management – IPO

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Lendlease Global Commercial Trust Management is offering 387.5 mil shares for it’s IPO on SGX Main Board at $0.88 per shares. The public offer opens on Sept 25 at 9 pm and closes on Sept 30 at 12 pm and expected to list on Oct 2.

Trading Timeline

Business Overview

The Lendlease Group is a leading international property and infrastructure group, with operations in Australia, Asia, Europe and the Americas. Headquartered in Sydney, Australia, the Lendlease Group has a strong track record of helping deliver innovative and sustainable property and infrastructure solutions globally, with a core expertise in shaping cities and
creating strong and connected communities.

Lendlease Global REIT will comprise a leasehold interest in one retail property located in Singapore and a freehold office property located in Milan, Italy. The properties are value at approximately S$1,405.3 million as at 31 July 2019.

The details of each of these properties are as follows:

  • A 99-year leasehold interest1 in 313@somerset, which is a retail property located in Singapore (the “Singapore Property”); and
  • A freehold interest in Sky Complex, which comprises three office buildings located in Milan, Italy (the “Milan Property”).

Balanced Lease Expiry Profile

A total of 12.2% of the existing leases of the IPO Portfolio by
leased NLA as at 30 June 2019 will expire in FY2020 and FY2021 and a total of 43.0% of the existing leases of the IPO Portfolio by Gross Rental Income for the month of June 2019 will expire in FY2020 and FY2021. 

Sky Italia holds a single lease over the Milan Property, Sky Complex, which it has held since 2008. Sky’s current lease term extends until 2032, which assists in underpinning the income stability of the IPO Portfolio.

Top 10 Tenants by Gross Rental Income

The IPO Portfolio has a high quality and well-diversified committed tenant
base of 150 tenants across 14 trade sectors. Approximately 71.1% of Lendlease Global REIT’s Gross Rental Income will be derived from a multi-tenanted property based on Lendlease Global REIT’s Gross Rental Income for the month of June 2019.

Top 10 Tenants by Gross Rental Income

Committed Occupancy

The IPO Portfolio has a committed occupancy rate of 99.9% as at 30 June 2019. The Properties have been successful in maintaining a consistently high committed occupancy rate of at least 99.0% since 2016.

Committed Occupancy

Financial Highlight

Based on the Offering Price, assuming that the Over-Allotment Option is not exercised. Excess of $33 milion will be use as working capital. 

The Forecast and Projected Statements of Profit or Loss for the Lendlease Global REIT Group for FY 2020 and 2021 before adjustment will be negative $15 millions and profit $45 millions. 

Dividends yield will be 5.80% and 6.01% for FY 2020 and FY 2021.

Profit and Loss

Conclusion

I like the tenants 313 is currently having like Food Republic and Hai Di Lao. Not forgetting the other top contributors to the GRI also for Sky Complex the occupancy is 100%. The dividend yield is also decent to me.

However, Sky Italia GRI is close to 30% which can be quite worrying if they decided to pull out from the lease.

 

Author: The Financial Guy

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