Lower office occupancy in Singapore and a one-off compensation fee have put a dent in Starhill Global Reit's first-quarter results.
The Reit has posted a distribution per unit (DPU) of 1.2 cents, down 7.7 per cent from the same period a year earlier. Income available for distribution in the three months ended Sept 30 was $26.7 million, down 9.3 per cent.
Gross revenue dipped 4.1 per cent to $53 million due to a one-off $1.9 million pre-termination rental compensation for a retail lease at Wisma Atria (which has been filled up), as well as lower contributions from offices and the overseas properties except for David Jones Building and Myer Centre Adelaide.
Net property income (NPI) fell 3.5 per cent to $41.4 million, but would have risen 0.9 per cent if the one-off pre-termination rental compensation had been excluded. NPI was lifted by higher retail revenue from Australia, including positive rent reversion from long-term leases, the appreciation of the Australian dollar against the Singdollar and lower expenses for the China operations. But this was offset by income disruptions from ongoing asset redevelopment works at Plaza Arcade, Perth, and a lower contribution from the Malaysia portfolio due to a weaker ringgit.
Starhill's Singapore assets, comprising interests in Wisma Atria and Ngee Ann City, delivered a 7.1 per cent fall in NPI to $26.1 million, due to lower office occupancy as well as the one-off rental compensation. This came even as Wisma Atria managed to lower expenses and achieve positive rental reversions.
Earnings per unit, which includes a gain in the fair value of derivative instruments of $1.4 million, was 1.2 cents in the quarter, up from 1.15 cents a year earlier.
Net asset value per unit was 0.92 cent as at Sept 30, unchanged from June 30.
AT A GLANCE
REVENUE: $53 million (-4.1%)
NET PROPERTY INCOME: $41.4 million (-3.5%)
DPU: 1.2 cents (-7.7%)
Overall portfolio occupancy was 93.4 per cent as at Sept 30, down from 95.5 per cent as at June 30. Although overall retail occupancy was 98.1 per cent as at Sept 30, Singapore office occupancy fell to 83.5 per cent from 92.9 per cent as at June 30.
"We are currently finalising terms with new prospective tenants for approximately a third of the vacant (Singapore office) spaces," the Reit said.
The counter closed down one cent or 1.28 per cent to 77 cents before earnings were announced.