STARHILL Global Reit's revenue for the third quarter ended March 31 fell 8.9 per cent to S$46.7 million, while its net property income fell 11.1 per cent to S$35.2 million.
The decrease in net property income was largely due to lower contributions from Starhill Gallery, in relation to its planned asset enhancement, rental assistance extended to eligible tenants in Singapore, Malaysia and China to cushion the impact of Covid-19 pandemic, as well as the depreciation of A$ against S$.
Income available for distribution fell 4.1 per cent S$24 million.
There is no proposed distribution to its unitholders for the third quarter, following Starhill Global Reit's change of its distribution frequency to semi-annual distributions.
As at March 31, approximately S$2.1 million in rental rebates had been disbursed to Starhill Global Reit's tenants, while the remaining S$11.6 million rental assistance will be funded largely by the S$10.8 million property tax rebates to be received from the Singapore government.
In Singapore, its Wisma Atria and Ngee Ann City properties are open only for some essential services between April 7 and June 1. With the new temporary law, Covid-19 (Temporary Measures) Act, passed this month, rental payments of affected tenants may potentially be deferred during this period, said the Reit manager.
In Australia, the department store David Jones remains open, but most of Starhill's other tenants (such as department store Myer and clothing retailer Uniqlo) have chosen to temporarily close their stores in response to heightened social-distancing measures. Myer has been closed since March 29, and will remain so until at least until May 11. In Kuala Lumpur, Malaysia, Starhill Gallery and Lot 10 Property have largely been closed since the Movement Control Order kicked in on March 18.
The group does not have any debt maturities in the next 12 months, except for a S$100 million medium-term notes due in February 2021 and some short-term debts drawn under its revolving credit facilities. Additionally, the group has available undrawn committed revolving credit facilities in excess of maturing debts and can be drawn down to fund its working capital requirements. The group's gearing level was at 36.7 per cent as at March 31.
Ho Sing, chief executive of the Reit manager, said: "Given these unprecedented circumstances, we are undertaking measures to maintain financial flexibility until there is more visibility on the pandemic. These measures include delaying non-essential capital expenditures for Starhill Global Reit, saving costs as well as reducing 10 per cent of base management fees payable by Starhill Global Reit for the next three months effective April 2020."
He added that the group is switching to semi-annual dividend distribution, which enables it to achieve cost savings and greater financial flexibility, and that it will continue to monitor the situation and proactively manage its long-term cash flow and its properties.