Starhill Global Reit's DPU stays stable in Q1

Starhill Global Reit's Singapore portfolio, comprising interests in Wisma Atria (left) and Ngee Ann City in Orchard Road, contributed 63.4 per cent of total quarterly revenue, or $35 million.
Starhill Global Reit's Singapore portfolio, comprising interests in Wisma Atria (left) and Ngee Ann City in Orchard Road, contributed 63.4 per cent of total quarterly revenue, or $35 million.ST PHOTO: JAMIE KOH

Higher contributions from S'pore and Malaysia properties mitigate lower returns elsewhere

Steady returns from its properties in Singapore and Malaysia despite the economic slowdown helped Starhill Global Reit keep distribution per unit (DPU) stable in the first quarter.

Its DPU for the three months to Sept 30 was 1.3 cents, compared with 1.31 cents a year earlier.

Revenue for the quarter declined 2.7 per cent over the previous corresponding period to $55.3 million, while net property income eased 1.7 per cent to $42.9 million.

The higher contributions from properties in Singapore and Malaysia mitigated lower contributions from Australia, China and Japan, the company said yesterday.

The Reit's Singapore portfolio, comprising interests in Wisma Atria and Ngee Ann City in Orchard Road, contributed 63.4 per cent of total quarterly revenue, or $35 million.

Net property income for the Singapore portfolio was lifted by higher rent from the master tenant at Ngee Ann City with effect from June, and the recognition of $1.9 million pre-termination rental compensation for a lease at Wisma Atria which has been filled up.

  • AT A GLANCE

  • NET PROPERTY INCOME $42.9 million (-1.7%)

    REVENUE $55.3 million (-2.7 %)

    DISTRIBUTION PER UNIT 1.3 Singapore cents (-0.8%)

Retail sales at Wisma Atria rose 4 per cent over the preceding year, and committed occupancy improved from the last quarter to 99.5 per cent as at Sept 30 as a number of tenants, including Joe and the Juice and Vivre Activewear, started operating during the quarter.

Shopper traffic at Wisma Atria rose 6.6 per cent year on year, due in part to the progressive re-opening of Isetan's strata-owned retail space, while tenant sales declined 5.4 per cent.

Ngee Ann City's retail revenue was up 4.9 per cent over the same quarter a year ago, while net property income rose 5.7 per cent, this being largely attributable to the increase in base rent from the Toshin master lease.

Mr Ho Sing, chief executive of the Reit manager, said the focus will be on the redevelopment of Plaza Arcade in Perth, Australia in the coming quarters.

The anchor tenancy has been secured and work is expected to start in the middle of next year, and to be completed in 2018.

"At an estimated construction cost of under $10 million, the redevelopment is expected to be accretive to unit holders," he added.

To mitigate the challenges of the high-end retail market in China, the Reit has also secured a new long-term tenant - Markor International Home Furnishings - one of the largest furniture retailers in the country.

Quarterly earnings per unit was 1.15 cents, down from 1.2 cents a year earlier.

Starhill's units fell 0.5 cent to 81 cents before the results came out.

A version of this article appeared in the print edition of The Straits Times on October 29, 2016, with the headline 'Starhill Global Reit's DPU stays stable in Q1'. Print Edition | Subscribe