Starhill Global REIT's NPI slid 1.8% to $39.56m in Q3

Lower contributions from its Singapore retail portfolio and higher property expenses dragged earnings.

Starhill Global REIT’s (SGREIT) net property income (NPI) dipped 1.8% YoY to $39.56m in Q3 FY 2019 from $40.28m, an announcement revealed. Revenue also slipped 0.9% YoY from $51.74m to $51.27m.

Higher YoY contributions from Myer Centre Adelaide, Plaza Arcade and Ngee Ann City Property were offset by lower contributions from its retail portfolio in Singapore, the depreciation of the AUD against SGD, as well as higher property expenses, the firm explained in its financial statement.

Revenue from its Singapore properties, which contributed 62% of total revenue or $31.8m in Q3, dropped 1.9% YoY, whilst NPI slid 3.1% YoY to $25m due to lower contributions from Wisma Atria Property, as well as higher operating expenses including allowance for rental arrears for Wisma Atria Property. This was partially offset by higher contributions from Ngee Ann City Property (Office).

Its Singapore retail portfolio’s actual and committed occupancies were 97.3% and 99.7%, respectively, as at 31 March 2019, albeit at a softer rent. Ngee Ann City Property (Retail) maintained full occupancy, whilst Wisma Atria Property (Retail) recorded actual and committed occupancies of 91.7% and 99.0%, respectively. SGREIT also achieved a 4.9% YoY tenant sales growth during the quarter. Toshin’s master lease is due for a rent review in June 2019, with a flat or higher rent.

Also read: Starhill Global REIT NPI down 2.3% to $40.44m in Q1

Meanwhile, its Australia properties, which contributed 22.2% of total revenue or $11.4m, edged up 3.1% YoY higher. NPI also rose 2.8% YoY to $7m mainly due to higher contributions from Myer Centre Adelaide and Plaza Arcade.

Actual occupancy of Australia’s office portfolio more than doubled to 74.9% as at 31 March 2019, following the commencement of the lease with a digital media solutions provider as the office anchor tenant at Myer Centre Adelaide during the current quarter, on the back of an improving office landscape in Adelaide.

According to YTL Starhill Global REIT Management, new conditional master tenancy agreements for SGREIT’s Malaysia properties have been entered into with the current master tenant, Katagreen Development Sdn Bhd, an indirect wholly-owned subsidiary of YTL Corporation Berhad, which include asset enhancement works (AEW) for Starhill Gallery (Proposed Transaction).

Income available for distribution in Q3 decreased 1.4% YoY to $25.04m from $25.39m, whilst distribution per unit (DPU) inched up 0.9% YoY to $0.011 from $0.0109 due to lower tax expenses and distributable income retained.

This represents an annualised distribution yield of 6.11%. Unitholders can expect to receive their Q3 FY18/19 DPU on 30 May 2019.