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Starhill Global Reit posts 0.9% rise in Q3 DPU

STARHILL Global Reit on Thursday posted a 0.9 per cent rise in distribution per unit (DPU) to 1.1 Singapore cents for the third quarter ended March 31.

This was mainly due to lower tax expenses and distributable income retained, and partially offset by lower net property income (NPI) and higher interest costs.

Gross revenue declined 0.9 per cent year-on-year to S$51.3 million, and NPI shrank by 1.8 per cent to S$39.6 million.

Income available for distribution fell 1.4 per cent to S$25 million for the quarter.

The annualised distribution yield is 6.11 per cent, and unitholders can expect to receive their third-quarter DPU on May 30.

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Starhill's Q3 performance was led by its Singapore portfolio, which comprises interests in Wisma Atria and Ngee Ann City on Orchard Road and contributed 62 per cent of total revenue or S$31.8 million in the quarter. For the Singapore portfolio, revenue and NPI continued to rise, and committed occupancy improved to 94.4 per cent as at March 31 from 90.7 per cent at the same point in 2018.

Its Australia portfolio, comprising Myer Centre Adelaide in Adelaide, South Australia, the David Jones Building and adjoining Plaza Arcade in Perth, Western Australia, contributed 22.2 per cent of total revenue or S$11.4 million. Actual occupancy of the Australia office portfolio more than doubled to 74.9 per cent as at March 31, with a digital media solutions provider commencing its lease as the office anchor tenant at Myer Centre Adelaide in Q3.

Its Malaysia portfolio, comprising Starhill Gallery and interest in Lot 10 along Bukit Bintang in Kuala Lumpur, contributed 13.5 per cent of total revenue in Q3.

In March 2019, Starhill entered into new conditional master tenancy agreements for its Malaysia properties with the current master tenant. The agreements include asset enhancement works for Starhill Gallery, which the Reit manager intends to finance with a combination of external borrowings and/or internal working capital.

The balance of its portfolio, which comprises a property in Chengdu, China and two properties located in central Tokyo, contributed 2.3 per cent of total revenue.

"Singapore retail occupancy continues to be resilient, achieving a higher committed occupancy... even as retail supply islandwide continues to rise amid soft consumer sentiment," said Ho Sing, the CEO of YTL Starhill Global REIT Management Limited. (see amendment note)

"The new master tenancy agreements for Malaysia Properties will provide income certainty and allow us to explore opportunities for the rest of the portfolio going forward."

Amendment note:  A previous version of this article misattributed a quote by YTL Starhill Global REIT Management Limited  CEO Ho Sing. The article has been revised to reflect the correct attribution.

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