Lendlease Global Commercial REIT ("LREIT") announced that it has acquired a 5% stake in JEM shopping mall in Jurong East. While the current acquisition stake is only 5%, it has demonstrated that LREIT has good potential for future growth due to the many properties that could be injected by their sponsor Lendlease Group. The diversification into a suburban mall with 12 levels of office further increases the resiliency of its future earnings. My personal thoughts are LREIT share price is severely undervalued and the market is putting up excessive risk premiums on LREIT relative to its peers.

1. LREIT Background

LREIT IPO price was at S$0.88 per unit on 2nd October 2019 (about 1 year ago). It later went up to S$0.955 per unit at one point in time before plummeting to an all time low of S$0.440 per unit during the March 2020 stock market crash. Holding on to Lendlease is thus a roller coaster ride despite the fact that it has two extremely good quality properties in its portfolio. LREIT derives...