Starhill Global REIT has reported a distribution per unit (DPU) of 1.80 cents for the 1HFY2024/2025 ended Dec 31, 2024, a growth of 1.1% y-o-y.
For the half-year period, the REIT’s gross revenue increased by 1.7% y-o-y to $96.3 million while net property income (NPI) rose by 1.6% y-o-y to $75.6 million.
The increase was mainly in line with higher contributions from the REIT’s Singapore and Perth properties, as well as the appreciation of the Malaysian ringgit against the Singapore dollar, partially offset by weaker contribution from Myer Centre Adelaide and higher operating expenses for its Australia properties.
Distributable income for the 1HFY2024/2025 likewise grew by 2.6% y-o-y to $41.3 million, due to higher NPI and lower tax expenses, retention of part of the net proceeds from certain Wisma Atria Property strata units divested during the current period, as well as the one-off leasing commission in relation to the master lease renewal with Toshin Development Singapore at Ngee Ann City Property in the previous corresponding period, partially offset by higher legal and professional fees.
As at Dec 31, 2024, cash and cash equivalents stood at $69.2 million.
The REIT’s committed portfolio occupancy also remained stable at 97.7% as at the same date, with a portfolio weighted average lease term expiry (WALE) of 7.4 years by net lettable area (NLA).
See also: Jardine Matheson posts loss of US$468 mil, but underlying net profit stood at US$1.47 bil
Additionally, gearing as at end-December 2024 stood at 36.8% while portfolio valuation stood at $2.8 billion.
As part of Wisma Atria’s ongoing rejuvenation plan, the asset’s drop-off point will be renovated to feature a modern design that aligns with the completed interior upgrading works. The $800,000 enhancement work will also create additional tenancy shopfront with added safety features and improved access for the disabled. Works are targeted to commence in the 4QFY2024/2025 with minimal disruption to shoppers.
Aside from the drop-off point revamp, the other initiative involves repurposing part of Wisma Atria’s carpark on level seven for office use. Some of the car park lots will be converted for the property manager’s usage, thereby freeing up 3,250 square feet of office space in Ngee Ann City for lease. The project cost is estimated at $4 million with a projected return on investment of above 8%, and works are also targeted to start in the 4QFY2024/2025.
On Jan 23, the manager of Starhill Global REIT also announced that the master tenancy agreement for the Lot 10 property has been extended for a third three-year term commencing Jul 1. Katagreen Development, a wholly-owned subsidiary of YTL Corporation, has exercised the call option for Lot 10 property under the existing master tenancy agreement for the extension.
The total annual rent for the third three-year term is around RM37.8 million ($11.5 million) per annum, which represents a 6.0% increase over the rent payable for the second three-year term.
“Global economic growth has been fragmented amid volatility in interest rates and rising trade tensions. Notwithstanding, our operations continue to demonstrate resilience and deliver healthy returns to unitholders. The asset rejuvenation initiatives completed over the past two years have enabled us to deliver the current performance,” says Francis Yeoh, chairman of the manager.
“Our operations in Singapore continue to perform well, with almost full occupancy and improved footfall on the back of positive rental reversions. We continue to monetise some of our strata office units at Wisma Atria Property with an average selling price of 23.6% above book value in 1HFY2024/2025, which further enhances our financial capacity to seek new growth opportunities. Meanwhile, we will continue to focus on rejuvenating our assets, particularly in Singapore and Australia,” adds Ho Sing, CEO of the manager.
Units in Starhill Global REIT closed 0.5 cents lower or 0.99% down at 50 cents on Jan 23.
