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Starhill Global REIT 2H19/20 DPU falls 68.2% to 0.70 cents

Felicia Tan
Felicia Tan • 3 min read
Starhill Global REIT 2H19/20 DPU falls 68.2% to 0.70 cents
For the full year ended June, DPU came in at 2.96 cents, a 33.9% decline from the 4.48 cents in FY18/19.
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The manager of Starhill Global REIT has announced distribution per unit (DPU) of 0.70 cents for the 2H19/20, some 68.2% lower than the 2.20 cents posted a year ago.

For the full year ended June, DPU came in at 2.96 cents, a 33.9% decline from the 4.48 cents in FY18/19.

The manager says it has retained some $3.8 million of 2H19/20 income available for distribution for capital working purposes. Some $7.7 million of distributable income for the same period has also been deferred.

This brings 2H19/20 distributable income to $26.9 million, registering a 46.2% y-o-y decline. For the FY19/20, distributable income fell 23.7% y-o-y to $77.4 million.

Distributable income for 4Q19/20 plunged 88.6% y-o-y to $2.8 million.

Gross revenue for 2H19/20 fell 18.5% y-o-y to $84.1 million mainly due to the rental assistance for eligible tenants, as well as the rental rebate extended to the master tenant during the asset enhancement period of Starhill Gallery in Malaysia.

The impact of the rental rebate for Starhill Gallery will be partially mitigated by the manager receiving part of its base management fee in units.

Gross revenue for 4Q19/20 fell 27.9% y-o-y to $37.4 million.

Property expenses for 2H19/20 grew 4.0% to $48.7 million due to higher operating expenses for its Australia properties, and largely offset by lower operating expenses for its properties in Singapore.

Property expenses for the quarter increased by 21.3% y-o-y to $14.5 million

Net property income (NPI) in 2H19/20 fell 27.0% y-o-y to $58.0 million. For 4Q19/20, NPI fell 42.7% y-o-y to $22.9 million.

As at end June, portfolio occupancy stood at 96.2% with a weighted average lease expiry (WALE) of 8.7 and 5.6 years by net lettable area (NLA) and gross rent, respectively.

As at end June, cash and cash equivalents stood at $117.4 million, higher than the $72.1 million registered last year.

“Global growth has slowed significantly, with projected growth entering negative territory this year. Even as governments around the world progressively reopen their economies following stay-home orders and shopper traffic has seen improvement since reopening, we remain cautious given the fluidity of the pandemic,” says Francis Yeoh, chairman of the manager.

“We have provided for further rental assistance to help our tenants through the business disruption due to the elevated safe distancing measures. We take heart that these are unprecedented times and call for us to stand in solidarity with our partners. Meanwhile, we continue to work proactively with our stakeholders to ride through this difficult period and we are confident of our quality portfolio over the long term,” Yeoh adds.

Looking ahead, the REIT says safe-distancing measures and travel restrictions due to the uncertain recovery trajectory are expected to “adversely impact” Starhill Global REIT’s financial performance.

“Given the fluidity of COVID-19 pandemic, the full impact cannot be ascertained at this juncture,” it said in a statement on Tuesday evening.

Unitholders can expect to receive their distributions on August 28.

As at 9.22am, units in Starhill Global REIT are changing hands 1 cent lower, or 2.1% down, at 46.5 cents.

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