REIT Discover: The Three R's Driving Starhill Global REIT (SGREIT SP)

Singapore Property Analyst

Anni Kum

Equity Bottom-Up

Lendlease Global Commercial REIT / Equity Bottom-Up

Lendlease Global Commercial REIT (LREIT SP)

Lendlease Global Commercial REIT (“LGC REIT”) lodged its preliminary prospectus with The Monetary Authority of Singapore this morning. The initial portfolio of LGC REIT is in line with what we have earlier expected, as discussed in our earlier insight – <a href="https://www.smartkarma.com/insights/singapore-reit-chasing-the-next-global-reit-ipo" target="_blank" data-smartkarma-citation="insights:31823" rel="noopener">Singapore REIT: Chasing the Next Global REIT IPO</a>. It comprises two assets – 313@Somerset (in Singapore) and Sky Complex (in Milan, Italy) with a combined asset value of S$1.4 bn.The IPO is expected to be priced at S$0.88 per unit, translating to an IPO market capitalization of just above S$1 bn. NAV per unit of LGC REIT is S$0.81 per unit. The IPO offer price translates to a Price/NAV of 1.08x.DPU forecasts for 9M FY20 and FY21 are 3.82 Singapore cents per unit and 5.29 Singapore cents per unit respectively, translating to a DPU yield of 5.8% for FY20 and 6.0% for FY21 respectively.Given its expensive valuation and limited debt headroom for future growth, the LGC REIT IPO is a mixed bag. Other than the good support from cornerstone investors, we do not see a compelling reason to subscribe for this IPO.

Lendlease Global Commercial REIT (“LGC REIT”) lodged its preliminary prospectus with The Monetary Authority of Singapore this morning. The initial portfolio of LGC REIT is in line with what we have earlier expected, as discussed in our earlier insight – Singapore REIT: Chasing the Next Global REIT IPO. It comprises two assets – 313@Somerset (in Singapore) and Sky Complex (in Milan, Italy) with a combined asset value of S$1.4 bn.The IPO is expected to be priced at S$0.88 per unit, translating to an IPO market capitalization of just above S$1 bn. NAV per unit of LGC REIT is S$0.81 per unit. The IPO offer price translates to a Price/NAV of 1.08x.DPU forecasts for 9M FY20 and FY21 are 3.82 Singapore cents per unit and 5.29 Singapore cents per unit respectively, translating to a DPU yield of 5.8% for FY20 and 6.0% for FY21 respectively.Given its expensive valuation and limited debt headroom for future growth, the LGC REIT IPO is a mixed bag. Other than the good support from cornerstone investors, we do not see a compelling reason to subscribe for this IPO. 

Singapore REIT: Lendlease Global Commercial REIT IPO, a Mixed Bag