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Starhill Global Q1 DPU falls to 1.13 S cents on lower income

STARHILL Global Real Estate Investment Trust (SGReit) has registered a decline in gross revenue, net property income, distributable income and distribution per unit (DPU) for the first quarter ended Sept 30.

The decline in revenue and net property income was mainly due to lower income, as a result of the planned asset enhancement of Starhill Gallery in Malaysia, SGReit manager YTL Starhill Global REIT Management announced in a press statement on Tuesday.

SGReit saw its revenue for the quarter decline 7.8 per cent from S$52 million to S$48 million, while net property income of S$36.9 million was 8.7 per cent lower than S$40.4 million for the corresponding period a year ago.

The decline in revenue and net property income will be largely mitigated by the manager receiving part of its base management fees in units. 

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Also, DPU was 1.7 per cent lower at 1.13 Singapore cents, compared to 1.15 cents in the year-ago period.

DPU would be paid out on Nov 29.

Chairman of YTL Starhill Global, Francis Yeoh, said: "Trade uncertainties and geopolitical tensions continue to impact global economic growth, with signs of synchronised slowdown across a majority of the countries in the world. However, this backdrop provides an opportunity for us to revamp our asset in Malaysia, namely Starhill Gallery, which will stand us in good stead when the economy improves. The recently-concluded new master tenancy agreements for Malaysia Properties with their long tenures and built-in periodic rental step-ups will provide income certainty and growth amid uncertain macroeconomic conditions."

The Singapore portfolio - made up of interests in Wisma Atria and Ngee Ann City - contributed 65.9 per cent of total revenue while net property income improved marginally by 0.3 per cent year-on-year to S$25.3 million, mainly due to lower operating expenses for Wisma Atria (retail) and the Singapore office portfolio.

YTL Starhill Global chief executive, Ho Sing, said: "Our Singapore portfolio performed well on the back of higher occupancies. Steady tourism growth in the first eight months of 2019, boosted by growth in Chinese and Japanese tourists, helped Wisma Atria property's tenant sales to increase by 12.7 per cent year-on-year in Q1 FY19/20. Singapore retail occupancy continues to exhibit resilience, achieving full occupancy on a committed basis as at Sept 30. Backed by our healthy financial standing, we will continue to explore new opportunities to deliver sustainable value to our unitholders."

Singapore retail portfolio's occupancy improved to 99.7 per cent as at Sept 30. On a committed basis, Singapore retail portfolio achieved full occupancy as at Sept 30. Retail tenant sales for Wisma Atria continued to grow at 12.7 per cent year-on-year while footfall traffic rose 2.8 per cent year-on-year in the first quarter. Meanwhile, occupancy rate for the Singapore office portfolio was stable at 93.6 per cent as at Sept 30 compared to 93.2 per cent as at June 30.

Wisma Atria has an existing unutilised plot ratio amounting to approximately 100,000 sq ft of gross floor area, and YTL Starhill Global said it is exploring options to potentially unlock the value of the space, in view of the upcoming new Orchard MRT Station serving the new Thomson-East Coast line.

SGReit units ended one Singapore cent or 1.35 per cent higher at S$0.75 on Tuesday.