SINGAPORE (Jan 29): The manager of Starhill Global REIT (SG REIT) has announced a distribution per unit (DPU) of 1.13 cents for 2Q19, 3.4% lower than its DPU of 1.17 cents a year ago due to lower net property income (NPI), higher interest costs and higher distributable income retained.
Gross revenue and NPI for the quarter fell 2.7% and 2.4% to $51 million and $39.5 million, respectively.
The lower topline came despite improved contributions from the Singapore office portfolio and higher office occupancy in Australia, both of which were offset by lower contributions from the Singapore retail portfolio and the depreciation of the AUD.
Starhill’s retail portfolio in Singapore had actual and committed occupancies of 97.8% and 99.2%, respectively as at end-2018 – albeit at a softer rent.
Notably, the retail segment of the Ngee Ann City property maintained full occupancy, while Wisma Atria (retail) achieved 2.9% y-o-y tenant sales growth over the latest quarter.
Finance expenses fell 2.8% to $19.3 million due to the write-off of upfront borrowing costs following the refinancing of SGD term loans in the corresponding period, which were offset in part by higher interest costs incurred on existing SGD term loans for the six months ended Dec 2018.
About $0.5 million of income available for distribution over the latest quarter under review has been retained for working capital requirements.
Notwithstanding the above, the manager says overall committed occupancy has improved to 96.6% due to more-than-double occupancy for Mayer Centre Adelaide within the office portfolio, as compared to a year ago.
“The global economy remains uncertain amidst challenging macroeconomic factors. Evolving consumer preferences continue to structurally change the way the global retail industry operates, thus creating new possibilities for us to rejuvenate our portfolio,” comments Francis Yeoh, chairman of the manager.
“We are exploring new concepts to reinvigorate Starhill Gallery in Kuala Lumpur, by tapping on the new vibrancy of Bukit Bintang following the completion of the new MRT station. Our strong financial standing and our prudence over the years will enable us to undertake such upgrading projects,” he adds.
Units in SG REIT closed 0.69% higher at 72 cents on Tuesday.
