Starhill Global REIT has reported a 4.2% and 8.7% y–o-y increase in gross revenue and net property income respectively for its 3QFY2021 ended March.
The REIT’s revenue stood at $48.4 million, while NPI was at $35.8 million. This was mainly due to the cessation of rental rebates following the completion of The Starhill’s asset enhancement works in December 2021 and lower rental assistance to tenants.
However, these gains were partially offset by lower contributions from Wisma Atria Retail and depreciation of the Australian dollar, affecting the REITs Australian properties.
In its business update, Starhill said Singapore retail occupancy rates remained “healthy” at 98.9%, and Wisma Atria enhancement works are in progress, with main retail area works targeted to be completed by December 2022
Furthermore, there are “new and incoming quality tenants across the portfolio”, including Italian fine jewelry luxury brand Roberto Coin at The Starhill, Uniqlo in Myer Centre Adelaide, Australia.
There are also new food and beverage (F&B) offerings in Malaysia’s Lot 10, including Shu Kingdom General Hotpot, Genki Sushi and 32 Parfait.
See also: Trump wins Republican nomination, setting up rematch with Biden
Overall portfolio occupancy stood at 97.4%, while WALE is at 7.3 years by net lettable area. Expiring retail leases by gross rents in FY2021 for the REIT was at 4.2%.
The REIT also revealed it had recently entered into a five-year unsecured term loan facility of $50 million, which will be used to refinance its outstanding term loan maturing in September 2022.
Starhill has a staggered debt maturity profile averaging 3.5 years, with no refinancing requirements until May 2023, following the above loan repayment in 2022. Gearing currently stands at 36.1%.
Separately, master leases and anchor leases, incorporating periodic rental reviews, represent approximately 52.7% of gross rent as at March 31, and partially mitigate the impact of the rising cost of utilities.
Outlook
Starhill has generally positive views for the geographies that its properties are in, namely, Singapore, Australia and Malaysia.
For Singapore, it notes the easing of Covid-19 measures in the country, and specifically for rentals, Starhill highlighted that prime rents in Orchard Road declined 2.0% y-o-y in 1Q 2022, although business expectations improved further with the relaxation of COVID-19 measures.
Grade A and Grade B office rents in the core Central Business District rose 5.3% and 0.6% respectively y-o-y in 1Q 2022, as positive leasing momentum continued in the office sector.
In Australia, net face rents in Western Australia and South Australia’s Super Prime CBD retail markets fell by 14.1% and 2.4% y-o-y respectively in 1Q 2022.
However, a bright spot is that Western and South Australia borders opened for international and interstate travel from March 3 and Feb 21 respectively
To stay ahead of Singapore and the region’s corporate and economic trends, click here for Latest Section
Level 1 measures continue to be implemented in Western Australia, with the 2 sq m rule applying to licenced hospitality venues and a 75% capacity limit for seated entertainment venues, but businesses have returned to full capacity in South Australia, with density limits lifted.
Finally, for Malaysia, Starhill pointed out that borders have reopened to fully vaccinated international travellers without quarantine from 1 April 2022.
From 1 May 2022, COVID-19 measures will be broadly lifted, masks are not required outdoors, check-ins via the MySejahtera app will cease and testing will not be required for fully vaccinated travellers.
Units of Starhill closed flat at 59.5 cents on April 28.
