Singapore-headquartered YTL Starhill Global REIT says revenues in the three months to March 31 eased 0.6 per cent year-on-year, to S$53.3 million while net property income declined 0.9 per cent to S$41.2 million.
While the trust benefited from higher contributions from master tenants in Singapore and Malaysia, and the David Jones Building in Australia, these were offset falling revenue from a mall repositioning in China and lower contributions from Wisma Atria Retail, Singapore offices and Myer Centre Adelaide.
SGREIT’s Singapore portfolio, comprising interests in Wisma Atria and Ngee Ann City on Orchard Road, contributed 62.5 per cent of total revenue, or $33.3 million in the quarter. Net property income (NPI) increased 0.5 per cent year-on-year to $26.5 million mainly due to higher rent from the master tenant at Ngee Ann City Property, partially offset by lower average rents for Wisma Atria Retail, lower occupancies for Singapore offices and higher operating expenses.
The Singapore retail portfolio had an occupancy of 98.9 per cent as at 31 March 2017.
Ngee Ann City Retail revenue gained 4.7 per cent year-on-year, while NPI rose 5.7 per cent, largely attributable to the increase in base rent from the Toshin master lease at Ngee Ann City Property effective from June 2016.
SGREIT’s Australia portfolio, comprising Myer Centre Adelaide in Adelaide, South Australia, and the David Jones Building and adjoining Plaza Arcade in Perth, Western Australia, contributed 23 per cent of total revenue, or $12.3 million, representing a 1.8 per cent year-on-year increase, resulting mainly from the appreciation of the Australian dollar against the Singapore dollar. NPI remained relatively stable at $7.9 million.
SGREIT’s Malaysia portfolio, comprising Starhill Gallery and interest in Lot 10 along Bukit Bintang in Kuala Lumpur, contributed 12.5 per cent of total revenue, or $6.7 million.
NPI was $6.5 million, up 3.2 per cent.
The balance of SGREIT’s portfolio, which comprises of one property in Chengdu, China and the four Japan Properties located in central Tokyo, contributed 2 per cent of total revenue, or $1.1 million. NPI was approximately $400,000, largely attributed to disruption from the mall repositioning at the China Property. The China mall has been handed over to the new long- term tenant Markor International Home Furnishings, and renovation works are expected to start in the current quarter.
Chairman Tan Sri Dato’ (Dr) Francis Yeoh said the retail environment continues to be challenging as retailers face both structural and cyclical changes.
“However, amidst the uncertainties, the global economies are showing signs of a turnaround. We have taken a strategic stance to ready ourselves for the recovery by rejuvenating some assets in our portfolio, and seeking out new opportunities both domestically and regionally so as to create value and strengthen long-term sustainable income for our unitholders.”