Lendlease Global Commercial REIT (Lendlease REIT) has acquired a 10.0% interest in Parkway Parade Partnership (PPP), which indirectly holds 77.09% of the share value in Parkway Parade.

The stake has been acquired from Lendlease Asia Investments Pty Limited at a purchase consideration of approximately SGD88.9 million.

Parkway Parade is an integrated office and retail asset in the eastern part of Singapore.

Based on the assumption that the acquisition was completed on 1 July 2021 and 1 July 2022 for FY2022 and 1H FY2023, respectively, DPU is expected to improve to 4.89 cents from 4.85 cents in FY2022, and 2.47 cents from 2.45 cents in 1H FY2023.

Lendlease REIT’s gearing based on proforma effects of the acquisition as at 31 December 2022 would be 40.4%, said the REIT.

The purchase will be financed through internal resources and debt facilities.

The purchase consideration for the acquisition is based on 10.0% of the net asset value of PPP, taking into account the agreed market value of Parkway Parade at SGD1,380.0 million.

The agreed market value was negotiated on a willing-buyer and willing-seller basis with reference to the independent valuations.

The estimated total cost of the acquisition is approximately SGD90.5 million.

Lendlease REIT was last done on the Singapore Exchange at SGD0.67, which presently implies a distribution yield of 7.31% according to data on the Singapore REITs table.

By Shariffa Al-Habshee

Shariffa joined REITsWeek in 2017, and monitors Asia-Pacific REITs for the publication.