Starhill Global REIT's Wisma Atria (Photo: REITsWeek)Starhill Global REIT's Wisma Atria (Photo: REITsWeek)

Despite the growing popularity of online shopping and suburban malls, the manager of Starhill Global REIT remains confident about its prospects for the years ahead, citing the REIT’s quality of properties and tenant mix.

These remarks come amid concerns that Orchard Road, where Starhill Global REIT’s two Singapore properties are located, may have lost its lustre as the republic’s premier shopping destination.

Starhill Global REIT derives 61.9% of its revenue for its 4Q 2016 from its Singapore properties.

“The key things have not changed”, said Ho Sing, CEO of Starhill Global REIT’s manager, in reference to shopper’s habits. “We will continue to leverage on our quality and location strength, and our tenant mix as key drivers for the markets that we operate in”, he added.

Ho was speaking with three other Singapore REITs at a media roundtable organised by Macquarie Securities in Singapore on 31 August.

In his elaboration, Ho highlighted that established international brands will usually select a downtown location, such as Orchard Road, to launch a flagship store when first entering a particular market.

“You will not see a flagship store opening in the suburbs”, said Ho, citing Apple, which will be launching its first official retail outlet in Singapore on Orchard Road, as an example.

“Decentralisation to suburban malls happen for mass market brands. The first landing point for a more premium brand is always the core downtown area, just like Tokyo’s Shinjuku and Ginza”, he said, adding that Starhill Global REIT targets a similar premium market segment when selecting its tenants.

Ho also posits that Singapore is still behind shopping other destinations such as Hong Kong and Tokyo in terms of variety in the choice of premium international brands.

“We see a lot of headroom for international brands to come in to Singapore”, he said, adding that Starhill Global REIT’s properties, Wisma Atria and Ngee Ann City, are well positioned to tap on this demand.

Besides Singapore, Starhill Global REIT currently has a portfolio of 12 primarily retail properties in Australia, China, Japan and Malaysia.

Units of Starhill Global REIT finished the trading day unchanged from its previous close on the Singapore Exchange at SGD0.805.

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.