Mingtiandi

Asia real estate and outbound investment news

  • Facebook
  • LinkedIn
  • RSS
  • Twitter
Sign Up / Login Logout

Lost your password?
Register
Forgotten Password
Cancel

Register For This Site

A password will be e-mailed to you.

  • Capital Markets
  • Events
    • Mingtiandi 2023 Event Calendar
    • Mingtiandi APAC Residential Forum 2023
    • Mingtiandi Asia Logistics Forum 2023
    • Mingtiandi Hong Kong Focus Forum 2023
    • Mingtiandi APAC Data Centre Forum 2023
    • Mingtiandi Asia Office Strategies Forum 2023
    • Mingtiandi Singapore Focus Forum 2023
    • More Events
  • MTD TV
  • People
  • Logistics
  • Data Centres
  • Asia Outbound
  • Retail
  • Research & Policy
  • Advertise

Lendlease REIT to Buy Out Jurong East Commercial Complex for $1.5B 

2022/02/15 by Christopher Caillavet Leave a Comment

Jem in Jurong East, Singapore

LREIT will have full direct ownership of Jem upon completion of the deal

Lendlease Global Commercial REIT (LREIT) is raising its bet on suburban retail with a S$2.08 billion ($1.54 billion) deal that gives it full ownership of a mixed-used complex in Singapore’s Jurong East area.

The SGX-listed REIT has agreed to purchase a 68.2 percent stake in Jem, a commercial project connected to Jurong East MRT station, from funds controlled by its sponsor, Australian developer Lendlease, just over half of a year after the trust had upped its holding in the complex to 31.8 percent, according to a statement to the bourse.

In a press release, Kelvin Chow, chief executive of LREIT’s manager, positioned the investment as expanding the trust’s holdings in a real estate segment that has proved its ability to deliver under challenging conditions.

“The acquisition of Jem is a natural transition for us as we recognise its benefits and resiliency throughout the pandemic,” Chow said. “The suburban retail market continues to perform well, and we believe that the Jurong region and its upcoming development plans will provide a great catchment for Jem.”

Betting on the Burbs

LREIT is upping its investment in Jurong East after the trust’s latest earnings report released last week showed that gross revenues dropped 5.8 percent in the second half of 2021 compared with the same period a year earlier.

The REIT’s manager attributed the slide to S$39.2 million in gross revenue from July to December 2021 to lower rental reversions on its 313@Somerset mall in Singapore’s Orchard Road area and to foreign exchange challenges facing an Italian retail asset in its portfolio.

Kelvin Chow Lendlease

Kelvin Chow of Lendlease has high hopes for suburban retail

Located among some of Singapore’s largest public housing estates in the city-state’s central region, Jem features a six-storey shopping mall and 12 levels of office space across 1,164,166 square feet (108,155 square metres) of gross floor area and 892,502 square feet of net lettable area.

The proposed deal values the property at S$2,329 ($1,729) per square foot of NLA, lower than JLL’s independent valuation of S$2,337 but higher than CBRE’s assessment of S$2,311.

The asset is on a leasehold of 99 years dating from 27 September 2010 and has 100 percent committed occupancy with a weighted average lease expiry of 5.9 years. Key tenants include Swedish furniture chain IKEA, hypermarket FairPrice Xtra and Japanese department store Don Don Donki.

The 2013-vintage Jem has undergone asset enhancement initiatives, including reconfiguration of the former Robinsons department store space and generation of additional NLA in the basement food hall, creating an opportunity to optimise tenant mix and augment overall rental rates, the manager said.

Simplified Structure

The trust plans to finance its acquisition of the stake in Jem from Lendlease Commercial Investments and Lendlease Retail Investments, the pair of funds that are currently its partners in the project, through a combination of equity fundraising, debt financing, cash reserves and other sources, according to the exchange statement.

LREIT currently holds a 31.8 percent indirect interest in Jem through its 24.8 percent stake in Lendlease Asian Retail Investment Fund 3 and its 53 percent stake in Lendlease Jem Partners Fund. Both Lendlease funds are expected to be wound up upon completion of the transaction.

The trust’s manager said the acquisition would give LREIT more exposure to the suburban retail segment and allow Jem to enjoy better tax transparency than under its current ownership structure, which involves indirect holding of the asset through the funds.

The Lendlease REIT is making its Jurong East investment just a few weeks after Singapore’s largest real estate organisation, CapitaLand, agreed to buy the JCube mall, located just five minutes’ walk to the west, from CapitaLand Integrated Commercial Trust for S$340 million.

Somerset Revamp

On the same day it revealed its bet on Singapore’s suburbs, LREIT also announced upgrades to some centre-city assets, including 313@Somerset, a 288,277 square foot mall on Singapore’s Orchard Road, which is the trust’s largest asset.

In a separate announcement to the exchange, LREIT’s manager said 313@Somerset would add 10,200 square feet of gross floor area — including two prime units on the ground floor — under an Urban Redevelopment Authority scheme permitting an increased plot ratio. The plan coincides with a tenant refresh that includes a new 7,100 square foot Puma flagship store.

“The additional gross floor area allows us to create a mall that connects with the surrounding environment, communities and our partners to deliver exceptional experiences for all our stakeholders,” Chow said. “The extra space has also enabled us to bring to the market novel concepts through collaborations with more retail partners.”

In addition to the floor expansion and refreshed tenant mix, LREIT will develop the nearby Grange Road car park into a multi-functional event space hosting concerts, films and events.

The trust, which Lendlease launched in 2019 via a S$1 billion IPO, also holds Sky Complex, a 985,967 square foot set of three office buildings in Milan, which accounts for roughly 30 percent of its portfolio.

Share this now

  • LinkedIn
  • Share
  • Tweet
  • Email

Filed Under: Finance Tagged With: cm-sea, daily-sp, Featured, Jurong East, Lendlease, Lendlease Global Commercial REIT, Singapore

Leave a Reply

Your email address will not be published. Required fields are marked *

Get Mingtiandi Delivered

MTD TV

Investors Boost APAC Logistics Deals Amid E-Commerce Boom
value-add forum 2021-03-30
Link REIT CEO George Hongchoy Says Sustainability Key to Boosting Returns

More MTD TV Videos>>

People in the News

Liu Weiliang Zhenro
Asia Real Estate People in the News 2023-01-23
Paul Davis JLL
JLL Hires Paul Davis, Shai Greenberg to Lead Japan International Capital Division
Craig Pearce Nikota Capital
Japan’s Nikota Capital Launches Real Estate Brokerage Arm
Eric Gan FHT
Frasers Promotes Eric Gan to FHT CEO as Eu Chin Fen Takes Over Hospitality Division

More Industry Professionals>>

People in the News

Asia Real Estate People in the News 2023-01-23

Liu Weiliang Zhenro

An ailing mainland developer leads this week’s set of personnel moves from around Asia, as a new chairman takes over at … Read More>>

JLL Hires Paul Davis, Shai Greenberg to Lead Japan International Capital Division

Paul Davis JLL

JLL has beefed up its Japan capital markets team with the hiring of Paul Davis and Shai Greenberg to serve as co-leads … Read More>>

Japan’s Nikota Capital Launches Real Estate Brokerage Arm

Craig Pearce Nikota Capital

Tokyo-based Nikota Capital has established Nikota Realty as a real estate brokerage division to help individual … Read More>>

Frasers Promotes Eric Gan to FHT CEO as Eu Chin Fen Takes Over Hospitality Division

Eric Gan FHT

Following the failed privatisation of Frasers Hospitality Trust last September, sponsor Frasers Property has made a … Read More>>

More Industry Professionals>>

Latest Stories

Ismail Gafoor of PropNex Realty
Singapore Home Price Growth Eases to More Than Two-Year Low as Sales Slide
Frasers Group JV Buys Half-Stake in Mercatus Singapore Mall for $497M
Sonny Kalsi BentallGreenOak
BentallGreenOak Buying Landmark Osaka Hotel for Reported $385M

Sponsored Features

Malls and Megaprojects from Hong Kong to Beijing Triumph at PropertyGuru Awards Show
Thomasin Crowley, WiredScore
Fit for the Future: Retrofitting Hong Kong’s Ageing Office Stock
Vlinker CEO Vic Zhou
Vlinker Unveils 3,000 Apartments in Multifamily Boost for Shanghai’s Minhang District

More Sponsored Features>>

Connect with Mingtiandi

  • Facebook
  • LinkedIn
  • RSS
  • Twitter

Real Estate News

  • Capital Markets
  • 2022 Event Calendar
  • MTD TV Archives
  • People
  • Logistics
  • Data Centres
  • Asia Outbound
  • Retail

More Mingtiandi

  • About Mingtiandi
  • Contact Mingtiandi
  • Mingtiandi Membership
  • Newsletter Subscription
  • Advertise
  • Terms of Use
  • Privacy
  • Join the Mingtiandi Team


© 2007-2023 China Advertising Media Ltd (Samoa). All rights reserved.

  • This field is for validation purposes and should be left unchanged.