Should Dividend Investors Buy Lendlease REIT After FY2022 Earnings?
August 11, 2022
Amid high inflation and rising interest rates, the share prices of Singapore’s REITs have held up relatively well. That’s partly because REITs provide a reliable stream of income, even during market volatility.
While most Singapore investors focus on the bigger REITs, there are other dividend-paying options. One that is closely watched is Lendlease Global Commercial REIT (SGX: JYEU).
This younger REIT – which only listed on the SGX in October 2019 – recently reported its H2 and FY2022 earnings. These were the REIT’s numbers for the six and 12 months ending 30 June 2022.
So, with Singapore inflation picking up, are Lendlease REIT’s shares worth buying for those of us seeking out a higher yield? Let’s find out.
H2 2022 DPU rises 4.9%
As a quick reminder, Lendlease REIT owns three properties; [email protected] and Jem, both in Singapore, and a collection of three commercial buildings named Sky Complex in Milan, Italy.
It also possesses a plot of land on Grange Road that is currently being redeveloped.
As for the REIT’s second-half results, its net property income (NPI) rose 72.9% year-on-year to S$45.9 million.
That jump was primarily attributable to the accretive acquisition of Jem and a better operating performance from at [email protected]
As for the crucial distribution per unit (DPU), effectively its dividend per share, Lendlease REIT saw a decent uplift.
The increase in the DPU for H2 2022 came to 4.9% year-on-year to 2.45 Singapore cents. This includes the advance distribution of 1.1371 Singapore cents for the period from 1 January to 30 March 2022.
New shares and DPU payment date
Readers should remember that Lendlease REIT also issued an additional 345.5 million units in a preferential offering.
That was done at a price of S$0.72 per unit (with the new units trading in late April) and helped the REIT fund its acquisition of Jem.
It also explains why its DPU growth was substantially slower than the growth for both NPI and distributable income.
Lendlease REIT will pay out a DPU of 1.3128 Singapore cents (for the period from 31 March to 30 June 2022) to eligible shareholders on 14 September 2022. Units will go ex-dividend on 17 August 2022.
Tim, based in Singapore but from Hong Kong, caught the investing bug as a teenager and is a passionate advocate of responsible long-term investing as a great way to build wealth.
He has worked in various content roles at Schroders and the Motley Fool, with a focus on Asian stocks, but believes in buying great businesses – wherever they may be. He is also a certified SGX Academy Trainer.
In his spare time, Tim enjoys running after his two young sons, playing football and practicing yoga.