China and Malaysia assets blemish Starhill’s stellar 1QFY16 results

Good thing profits were unscathed at $29.1m.

Assets in China and Malaysia caused a small hiccup Starhill Global REIT (SGREIT)’s otherwise stellar 1QFY16 results. However, thanks to newly acquired Myer Centre Adelaide’s full quarter contributions and SGREIT’s Singapore assets’ strong performance, gross revenue leapt 16.8% to S$56.8m. SGREIT’s profits this quarter are also up to S$29.1m from 3QFY14/15’s S$27m.

SGREIT’s overall occupancy portfolio was also at a solid 98.3%, although Wisma Atria (retail)’s negative 7.3% rental reversion and 9.7% decline in shopper caused a small dip during the quarter. OCBC notes, however, that “Wisma Atria (retail)’s committed occupancy improved from 98.1% to 100%, while tenants’ sales increased 1.1% YoY, a reversal from the declines recorded in the past few quarters.”

Conversely, SGREIT’s Singapore office portfolio scored not only a positive 3.5% rental reversion but also a 99.3% occupancy.

OCBC asserts that SGREIT’s financial position is strong, although “a sharper-than-expected depreciation in the foreign currencies which SGREIT is exposed to (AUD, CNY, JPY and MYR) and a slowdown in the recent recovery in tourist arrivals to Singapore” have been considered key risks.