Starhill Global REIT has reported a distribution per unit (DPU) of 1.85 cents for the 2HFY2025 ended June 30, unchanged y-o-y.
This brings the REIT’s FY2025 DPU to 3.65 cents, 0.6% higher y-o-y, and representing an annual yield of 7.2% based on the REIT’s closing unit price of 51 cents as at June 30.
The distribution reinvestment plan will apply for the 2HFY2025 DPU; the new issue price will be announced on or around Aug 6, says the REIT manager in its July 29 announcement.
For the 2HFY2025, gross revenue rose by 0.7% y-o-y to $95.8 million due to the higher contributions from the REIT’s retail properties in Singapore and net movement in foreign currencies. The gains were offset by the loss of contribution from the divestment of certain office strata units in Wisma Atria and the provision of rental arrears for the REIT’s China property.
Property operating expenses for the period increased by 2.95% y-o-y to $21.3 million.
Accordingly, net property income (NPI) for the 2HFY2025 inched up by 0.31% y-o-y to $74.5 million.
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Excluding the effects of the divestment, 2HFY2025 NPI would have increased by 0.6% y-o-y.
Income available for distribution for the 2HFY2025 increased by 4% y-o-y to $44.5 million. The REIT manager will retain about $2 million of the distributable income for working capital requirements.
Total return attributable to unitholders for the six months ended June surged to $65.5 million from $23 million.
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As at June 30, the REIT’s committed occupancy stood at 94.6%, down from 97.7% as at June 30, 2024. The decline was attributed mainly to the lower office occupancy at Myer Centre Adelaide due to the termination of a single tenant’s lease, which accounted for 0.7% of the group’s FY2025 revenue. The REIT says it is currently negotiating with a replacement tenant for part of the space.
Portfolio weighted average lease expiry (WALE) by net lettable area (NLA) stood at 7.2 years, down from last year’s 7.8 years.
As at June 30, the REIT has 12.5% in expiring leases by gross rental income (GRI), compared to 11.3% as at June 30, 2024.
Gearing as at the same period fell by 0.8 percentage points y-o-y to 36.8%. The REIT’s interest coverage ratio stood at 2.9 times as at June 30, compared to 3.1 times as at June 30, 2024.
As at the end of the REIT’s financial year, it has 76% of debt fixed or hedged, compared to 79% as at June 30, 2024.
“Since the onset of global tariffs, financial markets have experienced heightened volatility, fuelling concerns over rising business costs, weaker demand, and shifts in competitive dynamics. We have taken proactive steps to further strengthen our balance sheet and remain confident in our ability to navigate these challenges, just as we have consistently done over the past twenty years,” says Francis Yeoh, chairman of the REIT manager.
Ho Sing, CEO of the REIT manager, notes that the divestment of part of its office portfolio has “enabled us to demonstrate the value of the asset, strengthen our financials and further improve our liquidity in these uncertain times”.
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“The improved operational performance for the year was mainly driven by our Singapore portfolio, which achieved full committed occupancy and delivered positive rental reversions,” he adds.
As at June 30, the REIT's total portfolio is valued at $2.76 billion, 0.2% lower y-o-y. Excluding the divested Wisma Atria office units, the portfolio's valuation would have been up by 0.9% y-o-y.
As at the same period, cash and cash equivalents stood at $84.5 million.
The REIT will pay its distributions on Sept 24; its ex-date is on Aug 5.
Units in Starhill Global REIT closed flat at 54.5 cents on July 29.
