KUALA LUMPUR (April 29): YTL Corp Bhd’s Singaporean unit YTL Starhill Global REIT Management Ltd — the manager of Starhill Global Real Estate Investment Trust (SGREIT) — reported lower income for distribution for the third quarter ended March 31, 2020 (3QFY20).
In a statement today, YTL Starhill Global said SGREIT’s income available for distribution for the period stood at S$24 million (RM73.91 million), down 4.1% year-on-year (y-o-y) from S$25 million (RM76.99 million).
During the period, SGREIT saw its net property income (NPI) shrink to S$35.2 million (RM108.4 million), a decrease of 11.1% y-o-y while group revenue declined by 8.9% to S$46.7 million (RM143.82 million).
“Excluding the rental rebate extended to the master tenant during the asset enhancement period of Starhill Gallery in Malaysia, revenue and NPI for SGREIT Group in 3QFY20 decreased by 5.2% and 6.4% over 3QFY19 respectively,” it said.
YTL Starhill Global said the decline in revenue and NPI for the quarter under review was mainly attributed to the rental assistance extended to tenants in Singapore, Malaysia and China in light of the Covid-19 crisis as well as the depreciation of the Australian dollar against Singapore dollar.
The income disruption resulting from the planned asset enhancement of Starhill Gallery will be largely mitigated by the REIT manager receiving part of its base management fees in units, it added.
Commenting on SGREIT’s performance, YTL Starhill Global chairman Tan Sri Francis Yeoh said the Covid-19 situation is unprecedented with many businesses badly affected by the viral disease outbreak.
“The Covid-19 pandemic has literally brought the global economy to a standstill, as governments around the world progressively put their countries under lockdown, closed their borders and implemented strict social distancing measures to contain the spread.
“The current situation is unprecedented with many businesses being disrupted. We understand the plight of our tenants during this extraordinary time and we try our best to help them through the crisis as this is a long-term partnership,” said Yeoh, who is also executive chairman of YTL Corp.
“We have and are offering rental assistance to our tenants and will fully pass on the property tax rebates to be received from the Singapore government. Following many years of having a cautious investment approach, SGREIT is ready to move forward should any opportunities arise with the full support from its sponsor, YTL Group,” he added.
SGREIT has announced the change of its distribution frequency to semi-annual distributions from its current quarterly distributions with effect from 3QFY20. The next distribution will be for the six-month period from Jan 1 to June 30.
YTL Starhill Global said SGREIT will also be adopting the announcement of half-yearly reporting of financial statements with effect from the financial year ending June 30, 2021.
The switch to semi-annual distributions will offer SGREIT greater financial flexibility and achieve cost savings, it said.
Its chief executive officer Ho Sing said the firm is undertaking measures to maintain financial flexibility until there is more visibility on the pandemic.
These measures include delaying non-essential capital expenditures for SGREIT, saving costs as well as reducing 10% of base management fees payable by SGREIT for the next three months effective from April this year.
“We are also switching to semi-annual dividend distribution which allows us to achieve cost savings and greater financial flexibility. Given the fluidity of the Covid-19 pandemic, the situation is dynamic and would deteriorate further if it continues for a prolonged period.
“We will continue to monitor the situation closely and proactively manage our long-term cash flow and our properties. We have to position SGREIT well and be ready should any opportunities arise,” he said.