Singapore based Starhill Global REIT has posted a 16.8 per cent increase in revenue in the first quarter, to September 30.
YTL Starhill Global REIT Management, the manager of the trust, says revenue rose to S$56.8 million and net property income rose 10.2 per cent to $43.6 million. The growth was mainly driven by the full-quarter contribution from the recently-acquired Myer Centre in Adelaide, Australia, and the performance of its Singapore portfolio, partially offset by lower contributions from China and foreign currency movements.
Starhill Global’s Singapore portfolio, comprising interests in Wisma Atria and Ngee Ann City on Orchard Rd, contributed 60.1 per cent of total revenue, or $34.1 million during the quarter, led by positive rental reversions achieved in previous quarters, partially offset by higher operating expenses.
The Singapore retail portfolio recorded negative rental reversions of 7.3 per cent for leases committed during the quarter to accommodate new retail concepts, but these accounted for less than three per cent of the revenue, excluding the Toshin master lease at Ngee Ann City Retail.
Wisma Atria Retail revenue increased 7.7 per cent. Tenant sales at Wisma Atria rose 1.1 per cent year on year, mainly due to contributions from tenants which have recently started their operations at the mall. However, shopper traffic was down 9.7 per cent, as the strata area owned by Isetan remained closed for its renovations.
Isetan’s new tenant in the basement level, Mango, opened in September 2015.
The trust’s Australia portfolio, comprising Myer Centre Adelaide and the David Jones Building and adjoining Plaza Arcade in Perth, Western Australia, achieved a net property income of S$8.6 million, 113.2 per cent higher than the previous corresponding period mainly due to the full-quarter contribution from the recently acquired Myer Centre Adelaide, but partially offset by depreciation of the Australian dollar against the Singapore dollar and lower occupancies at David Jones Building. The trust is in negotiations with tenants over redevelopment plans at Plaza Arcade to accommodate anchor tenants and optimise upper-storey space.
The trust’s Malaysia portfolio, comprising Starhill Gallery and interest in Lot 10 along Bukit Bintang in Kuala Lumpur, contributed 11.5 per cent of total revenue, or S$6.5 million in the quarter.
NPI was approximately S$6.3 million, down 16 per cent on the previous corresponding period, mainly due to depreciation of the Malaysian ringgit against the Singapore dollar and reversal of excess provision of property taxes in the previous corresponding period following the revision in property tax assessment.
Renhe Spring Zongbei in Chengdu, China, contributed 3.4 per cent of total revenue, or S$1.9 million and its NPI was S900,00, a decline of 27.5 per cent.
“The decline was largely attributed to lower revenue as the high-end luxury retail segment continues to be impacted by the austerity measures the central government has put in place, as well as increasing challenges and competition from new and upcoming malls in the city,” said YTL Starhill Global REIT Management in a statement.
The Japan portfolio, which comprises five properties located in central Tokyo, contributed two per cent of total revenue and achieved NPI of $900,000, 11.5 per cent higher than in the previous corresponding period, largely attributable to higher occupancies and lower operating expenses, partially offset by depreciation of the Japanese yen against the Singapore dollar.
