Lendlease Global Commercial REIT (LREIT): PhillipCapital, CGS International Maintain ‘Buy’ Calls, TP Unchanged

PhillipCapital Maintains ‘Buy’ Call With TP of $0.95

PhillipCapital analyst Natalie Ong maintained her ‘buy’ rating on Lendlease Global Commercial REIT (SGX: JYEU) with an unchanged target price of $0.95.

According to the PhillipCapital report, the REIT’s portfolio remains defensive with long weighted average lease expiries (WALE) of 5.6 years, a low occupancy cost for tenants, and a healthy tenant mix.

The analyst also highlighted LREIT’s ability to generate stable cash flows, which will be supported by committed rental escalations and the recently announced acquisition of Jem.

CGS International Reiterates ‘Buy’ Rating, TP of $0.97

CGS-CIMB analyst Eing Kar Mei also reiterated her ‘buy’ rating on LREIT, with an unchanged target price of $0.97.

The analyst noted that LREIT’s portfolio is well-diversified across sectors and geographies, with a focus on office and retail assets.

Eing also emphasized LREIT’s strong balance sheet, with gearing of 37.5% as of June 2023, which provides ample headroom for future acquisitions.

Outlook

Both analysts believe that LREIT is well-positioned to benefit from the recovery in the office and retail sectors.

PhillipCapital’s Natalie Ong expects LREIT to report a 14.5% increase in DPU for FY23, supported by higher rental income and the contribution from Jem.

CGS-CIMB’s Eing Kar Mei forecasts a 12.4% growth in DPU for FY23, driven by contributions from Jem and committed rental escalations.

Risks

The key risks to LREIT’s outlook include: