Starhill Global Reit net property income rises 8.4% in Q1

Janice Lim
Published Thu, Oct 27, 2022 · 11:17 PM

STARHILL Global Real Estate Investment Trust’s (Reit) net property income rose 8.4 per cent to S$37.2 million in its first fiscal quarter ended Sep 30, from S$34.3 million a year ago.

Gross revenue was up at S$47.6 million, from S$44.8 million over the same period — an increase of 6.2 per cent.

Starhill Global Reit : P40U 0% said in a bourse filing on Thursday (Oct 27) the increase in both revenue and net property income was because it had stopped providing rental rebates to tenants and lowered its rental assistance after the completion of asset enhancement works in December 2021.

This was partially offset by the depreciation of the Australian dollar and the Malaysian Ringgit, as well as lower contribution from one of its retail asset, Wisma Atria.

As at Sep 30, the occupancy rate of its portfolio stood at 96.9 per cent, while the weighted average lease expiry was 7 years.

Master and anchor leases, which incorporate rental reviews, make up 53 per cent of gross rent, providing income and occupancy stability for the portfolio.

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Over 60 per cent of the Reit’s Q1 revenue came from its Singapore assets, while Australia assets contributed 22.1 per cent, and Malaysia accounted for 15.5 per cent. Retail assets contributed 85.6 per cent of this quarter’s revenue, while the rest came from office.

Shopper traffic at Wisma Atria improved by 40.7 per cent year on year, while tenant sales went up 37.1 per cent, reflecting a gradual recovery from the Covid-19 pandemic.

The Reit has an outstanding debt of S$1.1 billion, with a gearing of 36.5 per cent.

As for its outlook, Starhill said that geopolitical tensions, elevated inflation and rising interest rates continue to temper post-pandemic economic recovery.

It added that proactive interest rate hedging partially mitigates the impact of rising rates on its distribution per unit.

Rising operating expenses from higher utility costs are partially mitigated by master and anchor tenants, which make up about half of its leases, as well as utilities contracts that have been locked in.

For its Singapore properties, Starhill Global noted that international visitor arrivals are still half of what was recorded in September 2019, even though pandemic-induced travel restrictions have eased.

However, it noted that the Singapore Tourism Board expects 4 to 6 million international visitor arrivals for the whole of this year, which will benefit the Orchard Road retail belt.

The opening of another Orchard MRT station on the new Thomson-East Coast Line would also enhance accessibility to the area.

Units of the Reit closed 1 per cent or S$0.005 higher at S$0.52 on Thursday.

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