Starhill Global REIT posts fiscal 2H net property income rose 20 percent

Starhill Global REIT mall Wisma AtriaStarhill Global REIT mall Wisma Atria. Note: Photo taken pre-Covid

Starhill Global REIT reported Thursday its fiscal second half net property income rose 20.2 percent on-year to S$69.8 million, mainly on lower rental assistance for tenants affected by the Covid-19 pandemic and as the Australian dollar appreciated against the Singapore dollar.

Gross revenue for the six months ended 30 June increased 10.5 percent on-year to S$92.9 million, the REIT said in a filing to SGX.

Distribution per unit (DPU) for the period was 1.86 Singapore cents, up 77.1 percent on-year, even with S$3.6 million of income available for distribution being retained for working capital requirements, the REIT said. The retention lowered DPU by 0.21 Singapore cent.

The funds retained were “as a measure of prudence” amid the emergence of the Delta variant and resurgence of Covid-19 cases, and as the Wisma Atria property is undergoing interior upgrading works, the REIT said.

For the full fiscal year, net property income increased 2 percent on-year to S$134.7 million on gross revenue of S$181.3 million, up 0.3 percent on-year, the REIT said. The DPU for the full year was 3.60 Singapore cents, with S$4.6 million of income available for distribution being retained for working capital requirements.

During the fiscal year, Singapore tenant sales and shopper traffic were below pre-Covid levels, down 28.7 percent and 48 percent respectively, at the Wisma Atria and Ngee Ann City properties in the Orchard Road shopping belt, amid a decline in tourist arrivals, default work-from-home arrangements and other safe-distancing measures, the REIT said. The Singapore properties contributed 63.4 percent of total revenue.

The Australia retail property portfolio, comprising Myer Centre Adelaide in Adelaide, South Australia, the David Jones Building and the adjoining Plaza Arcade in Perth, Western Australia, had stable occupancy of 94.4 percent at end-June, the REIT said. The Australia properties contributed 24.3 percent of total revenue.

The Malaysia portfolio, comprising The Starhill and interest in Lot 10 along Bukit Bintang in Kuala Lumpur, contributed 9.8 percent of total revenue, the REIT said.

The property in Chengdu, China, and two properties in Tokyo, Japan, contributed 2.5 percent of revenue, Starhill Global REIT said.

Outlook

Ho Sing, CEO of the REIT’s manager, was cautiously optimistic on the outlook.

“Shopper traffic and tenants’ sales gained momentum between January and May 2021. However, the surge in COVID-19 cases put this positive trend on hold. Nevertheless, we continue to reposition our assets for the future. We attracted new tenants and are rejuvenating our malls to cater to evolving consumer preferences,” Ho said in the statement.

Ho noted that despite uncertainty, the retail portfolio’s committed occupancy was stable at 97.5 percent as of end-June.