SINGAPORE (Oct 30): The manager of Starhill Global Real Estate Investment Trust (SGREIT) has announced distribution per unit (DPU) of 1.13 cents for the 1Q19/20 ended September, some 1.7% lower than DPU of 1.15 cents a year ago.
Income available for distribution fell 3.4% to $25.3 million in 1Q19/20, compared to $26.2 million a year ago.
Excluding around $0.7 million retained for working capital purposes, income to be distributed to unitholders is 1.6% lower at $24.7 million.
The 1Q19/20 DPU will be paid on Nov 29.
The decline in distribution comes on the back of a 7.8% drop in gross revenue to $48.0 million in 1Q19/20, from $52.0 million a year ago.
This was in line with the partial income disruption from the planned asset enhancement of Starhill Gallery in Malaysia, as well as the depreciation of the Australian dollar against the Singapore dollar.
Property expenses fell 4.4% to $11.1 million during the quarter, compared to $11.6 million in 1Q18/19.
Consequently, net property income (NPI) was $36.9 million in 1Q19/20, some 8.7% lower than NPI of $40.4 million a year ago.
As at end-September, cash and cash equivalents stood at $73.2 million, with stable gearing level at 36.2%.
“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,” says Tan Sri Dato’ Francis Yeoh, chairman of the manager.
Completion of the first phase of the asset enhancement at Starhill Gallery – which remains partially open during the period of the asset enhancement works – is scheduled for 2020.
Following the asset enhancement, Starhill Gallery will be renamed The Starhill. The official launch of the revamped mall with hotel rooms expected in 2021.
Meanwhile, Ho Sing, CEO of the manager, notes that Starhill Global REIT’s Singapore portfolio has performed well on the back of higher occupancies.
Comprising interests in Wisma Atria and Ngee Ann City on Orchard Road, the REIT’s Singapore portfolio contributed revenue of $31.6 million in 1Q19/20, representing 65.9% of total revenue.
NPI for the Singapore assets improved marginally by 0.3% during the quarter, on the back of lower operating expenses for Wisma Atria Property (Retail) and the Singapore office portfolio in 1Q FY19/20.
“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% y-o-y in 1Q19/20. Singapore retail occupancy continues to exhibit resilience, achieving full occupancy on a committed basis as at Sept 30, 2019,” Ho says.
As at 11.47am, units in Starhill Global REIT are trading half a cent lower at 74.5 cents. Year-to-date, the counter is up 10.4%.
