Starhill Global REIT property in Singapore, Ngee Ann City. (Photo: REITsWeek)Starhill Global REIT property in Singapore, Ngee Ann City. (Photo: REITsWeek)

Singapore-listed retail REIT, Starhill Global REIT (SGX:P40U), announced on 29 April that it has achieved a distribution per unit (DPU) of 1.26 Singapore cents for its 5Q FY14/15, 1.6% higher compared to the 1.24 Singapore cents achieved for the previous corresponding period.

The REIT’S financial year end has been changed from 31 December to 30 June. Thus the FY14/15 financial year will be a 18- month period from 1 January 2014 to 30 June 2015, resulting in a 5Q. Similarly, distributable income for the period stands at SGD27.1 million, 1.6% higher than the SGD26.7 million for 1Q FY14/15.

However revenue for the declined marginally by 2.7% over the previous corresponding period to SGD47.9 million in 5Q FY14/15 mainly due to lower contributions from China, loss of income contribution from Japan divestment in March 2014 and net foreign currency movements, said the REIT.

However an acquisition in the pipeline is expected to bolster DPU in the medium term. “We have entered into a sale and purchase agreement to acquire Myer Centre Adelaide, a freehold asset and the city’s largest shopping centre of 602,000 sq ft of net lettable area of largely retail space, at a purchase price of AUD288 million (SGD305 million)”, said Ho Sing, Starhill Global REIT’s manager.

“The property provides an attractive yield of 6.6% a is 2.8% accretive to our DPU on a pro forma historical basis”, he added. The acquisition will be funded by debt and expected to increase the REIT’s gearing from 28.6% as at 31 December 2014 to 35.3% upon acquisition.

Units of Starhill Global REIT are currently listed on the Singapore Exchange at SGD0.865.

Starhill Global REIT property in Singapore Ngee Ann City
Starhill Global REIT property in Singapore Ngee Ann City

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.