4c. external presentation slides 3q fy1920 v22...
TRANSCRIPT
Singapore Australia Malaysia Japan China
Third Quarter FY 2019/20 Financial Results28 April 2020
Key highlights
Income available for distribution stood at S$24.0 million for 3Q FY19/20
– Income available for distribution for 3Q FY19/20 stood at S$24.0 million, 4.1% lower than3Q FY18/19
– Group revenue and NPI for 3Q FY19/20 declined by 8.9% and 11.1% y-o-y respectively.Excluding the rental rebate extended to the master tenant during asset enhancement period ofStarhill Gallery in Malaysia, revenue and NPI for the Group in 3Q FY19/20 decreased by 5.2%and 6.4% y-o-y respectively
– The decline in revenue and NPI for 3Q FY19/20 was mainly attributed to the rental assistanceextended to tenants in Singapore, Malaysia and China to assist tenants in cushioning the impactof the COVID-19 pandemic, as well as depreciation of A$ against S$
– As per the Circular to Unitholders dated 25 April 2019, the income disruption resulting from theplanned asset enhancement of Starhill Gallery will be largely mitigated by the Manager receivingpart of its base management fees in units
– Following the change of distribution frequency to semi-annual distributions with effect from3Q FY19/20, there is no proposed distribution to its Unitholders for the three-month period from1 January 2020 to 31 March 2020. The next distribution will be for the six-month period from1 January 2020 to 30 June 2020. SGREIT will also adopt half-yearly reporting of financialstatements with effect from FY 20/211.
3
Note: 1. For further details, please refer to the SGX-ST announcement issued on 8 April 2020.
Key highlights
Property highlights
– NPI of Singapore retail portfolio declined 5.3% y-o-y mainly due to the rental assistance extended toeligible tenants to alleviate impact of COVID-19 pandemic
– Singapore retail portfolio registered an actual occupancy of 99.5% as at 31 March 2020, with Ngee AnnCity Property (Retail) being fully occupied as at 31 March 2020
– Actual occupancy of Australia office portfolio rose to 94.8% as at 31 March 2020, from 94.5% as at31 December 2019, while actual occupancy of the Australia’s retail portfolio stood at 94.3% as at31 March 2020
– Our assets in Singapore and Malaysia have encountered movement restriction orders while retail tenantsin Australia and China were impacted by stricter social distancing measures and lower tourist arrivals
Capital management
– Gearing level stood at 36.7% as at 31 March 2020. SGREIT also hedged about 87% of its borrowingsand the average debt maturity is approximately 2.7 years as at 31 March 2020
– In March 2020, Fitch Ratings has assigned a “BBB” corporate credit rating with stable outlook toSGREIT, its medium-term notes programmes and the notes drawn under the programmes
– SGREIT does not have any debt maturities in the next 12 months, save for S$100 million medium termnotes due in February 2021 and some short-term debts drawn under its revolving credit facilities
– The Group has available undrawn committed revolving credit facilities which is in excess of maturingdebts and can be drawn down to fund its working capital requirement
4
Period: 1 Jan – 31 Mar
3 months ended
31 Mar 2020
(3Q FY19/20)
3 months ended
31 Mar 2019
(3Q FY18/19)
% Change
Gross Revenue (1) $46.7 mil $51.3 mil (8.9%)
Gross Revenue (excluding Starhill Gallery) (1) $44.5 mil $47.0 mil (5.2%)
Net Property Income (1) $35.2 mil $39.6 mil (11.1%)
Net Property Income (excluding Starhill Gallery) (1) $33.1 mil $35.4 mil (6.4%)
Income Available for Distribution $24.0 mil $25.0 mil (4.1%)
Income to be Distributed to Unitholders - (2) $24.0 mil (3) NM
DPU - (2) 1.10 cents NM
3Q FY19/20 financial highlights
5
Notes: 1. Net of rental rebates extended to eligible tenants.2. Following SGREIT’s change of its distribution frequency to semi-annual distributions, there is no proposed distribution declared for 3Q FY19/20.3. Approximately S$1.0 million of income available for distribution for 3Q FY18/19 has been retained for working capital requirements.
Period: 1 Jul – 31 Mar
9 months ended
31 Mar 2020
(YTD FY19/20)
9 months ended
31 Mar 2019
(YTD FY18/19)
% Change
Gross Revenue (1) $143.4 mil $154.3 mil (7.1%)
Gross Revenue (excluding Starhill Gallery) (1) $137.7 mil $141.4 mil (2.7%)
Net Property Income (1) $109.2 mil $119.5 mil (8.6%)
Net Property Income (excluding Starhill Gallery) (1) $103.9 mil $107.0 mil (2.9%)
Income Available for Distribution $74.5 mil $76.4 mil (2.5%)
Income to be Distributed to Unitholders $49.4 mil (2) (3) $73.7 mil (3) NM
DPU 2.26 cents (2) 3.38 cents NM
YTD FY19/20 financial highlights
6
Notes: 1. Net of rental rebates extended to eligible tenants.2. Following Starhill Global REIT’s change of its distribution frequency to semi-annual distributions, there is no proposed distribution declared for 3Q FY19/20. The reported
number for YTD FY19/20 comprise the total distributions declared for the six-month period from 1 July 2019 to 31 December 2019.3. Approximately S$1.1 million of income available for distribution for the six months ended 31 December 2019 (2019: S$2.6 million for nine months ended 31 March 2019)
has been retained for working capital requirements.
2.90 3.10 3.58 3.80 3.90 4.12 4.39
5.11 5.18 4.92 4.55
1.15 1.13
2.49
1.13 1.13
1.10
1.10
-
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014/15 FY2015/16 FY2016/17 FY2017/18 FY2018/19 FY2019/20
Cents
5.00
FY 2014/15 (18 months) (3)
7.60
FY 2018/194.48
4Q
3Q
2Q
1Q
DPU performance
7
Notes: 1. DPU from 1Q 2006 to 2Q 2009 have been restated to include the 963,724,106 rights units issued in August 2009.2. For the period from FY 2006 to FY 2018/19. DPU for FY 2014/15 (18 months ended 30 June 2015) has been annualised for the purpose of computing CAGR.3. Following the change of Starhill Global REIT’s financial year end from 31 December to 30 June, FY 2014/15 refers to the 18-month period from 1 January 2014 to
30 June 2015.4. Following SGREIT’s change of its distribution frequency to semi-annual distributions, there is no proposed distribution declared for 3Q FY19/20. The reported
number for YTD FY19/20 comprise the total distributions declared for the six-month period from 1 July 2019 to 31 December 2019.
YTD FY19/20 (4)
3Q FY19/20 financial results
8
Note:
1. Includes certain finance costs, sinking fund provisions, straight-line rent adjustment, accretion of security deposits, trustee fees, commitment fees, deferred income tax, change in fair value of derivative instruments,foreign exchange differences, FRS 116 adjustments and management fees payable in units.
$’000 3Q FY19/20 3Q FY18/19 % Change
Gross Revenue 46,684 51,267 (8.9%)
Less: Property Expenses (11,514) (11,712) (1.7%)
Net Property Income 35,170 39,555 (11.1%)
Less: Finance Income
Management Fees
Trust Expenses
Finance Expenses
Change in Fair Value of Derivative Instruments
Foreign Exchange Gain/(Loss)
Income Tax
163
(3,878)
(1,193)
(9,753)
(5,639)
457
(649)
230
(3,904)
(1,124)
(9,618)
(1,639)
(31)
(934)
(29.1%)
(0.7%)
6.1%
1.4%
244.1%
NM
(30.5%)
Total Return After Tax 14,678 22,535 (34.9%)
Add: Non-Tax Deductible items and other adjustments (1) 9,339 2,503 273.1%
Income Available for Distribution 24,017 25,038 (4.1%)
YTD FY19/20 financial results
9
Note:
1. Includes certain finance costs, sinking fund provisions, straight-line rent adjustment, accretion of security deposits, trustee fees, commitment fees, deferred income tax, change in fair value of derivative instruments,foreign exchange differences, FRS 116 adjustments and management fees paid/payable in units.
$’000 YTD FY19/20 YTD FY18/19 % Change
Gross Revenue 143,402 154,330 (7.1%)
Less: Property Expenses (34,161) (34,831) (1.9%)
Net Property Income 109,241 119,499 (8.6%)
Less: Finance Income
Management Fees
Trust Expenses
Finance Expenses
Change in Fair Value of Derivative Instruments
Foreign Exchange Gain/(Loss)
Income Tax
675
(11,801)
(3,353)
(29,668)
(6,420)
766
(1,990)
678
(11,909)
(3,088)
(28,899)
(7,413)
(95)
(2,663)
0.4%
(0.9%)
8.6%
2.7%
(13.4%)
NM
(25.3%)
Total Return After Tax 57,450 66,110 (13.1%)
Add: Non-Tax Deductible items and other adjustments (1) 17,060 10,296 65.7%
Income Available for Distribution 74,510 76,406 (2.5%)
Net Property Income
$’000 3Q FY19/20 3Q FY18/19 % Change
Wisma Atria
Retail (1)
Office (2)
9,009
1,842
9,835
1,654
(8.4%)
11.4%
Ngee Ann City
Retail
Office (3)
10,215
2,442
10,465
2,999
(2.4%)
(18.6%)
Singapore
Australia (4)
Malaysia (5)
Others (6) (7)
23,508
6,396
4,428
838
24,953
6,990
6,709
903
(5.8%)
(8.5%)
(34.0%)
(7.2%)
Total 35,170 39,555 (11.1%)
Total 33,121 35,385 (6.4%)
Revenue
$’000 3Q FY19/20 3Q FY18/19 % Change
Wisma Atria
Retail (1)
Office (2)
11,855
2,514
12,939
2,458
(8.4%)
2.3%
Ngee Ann City
Retail
Office (3)
12,378
3,265
12,671
3,726
(2.3%)
(12.4%)
Singapore
Australia (4)
Malaysia (5)
Others (6) (7)
30,012
10,886
4,656
1,130
31,794
11,367
6,932
1,174
(5.6%)
(4.2%)
(32.8%)
(3.7%)
Total 46,684 51,267 (8.9%)
Total 44,506 46,970 (5.2%)
3Q FY19/20 financial results
10
Notes:1. Mainly due to rental assistance for COVID-19 extended to eligible tenants.2. Mainly due to lower operating expenses.3. Mainly due to lower average occupancies and higher operating expenses.4. Mainly due to depreciation of A$ against S$ and lower contributions from Australia’s retail portfolio, partially offset by higher contributions from Australia’s office portfolio. In Australian dollar
terms, NPI declined by 2% y-o-y in 3Q FY19/20.5. Mainly due to rental assistance for COVID-19 extended to master tenant and lower contributions from Starhill Gallery in relation to its planned asset enhancement. The impact on the
distributable income will be largely mitigated by the Manager receiving part of its base management fees in units during the asset enhancement period.6. Others comprise one property in Chengdu, China and two properties in Tokyo, Japan, as at 31 March 2020.7. Mainly due to rental assistance extended to the tenant in China in March 2020.
(excluding Starhill Gallery) (excluding Starhill Gallery)
Net Property Income
$’000 YTD FY19/20 YTD FY18/19 % Change
Wisma Atria
Retail
Office
29,598
5,340
29,699
5,254
(0.3%)
1.6%
Ngee Ann City
Retail
Office (1)
30,796
8,022
31,348
8,961
(1.8%)
(10.5%)
Singapore
Australia (2)
Malaysia (3)
Others (4)
73,756
19,767
13,043
2,675
75,262
21,408
20,135
2,694
(2.0%)
(7.7%)
(35.2%)
(0.7%)
Total 109,241 119,499 (8.6%)
Total 103,903 106,985 (2.9%)
YTD FY19/20 financial results
11
Revenue
$’000 YTD FY19/20 YTD FY18/19 % Change
Wisma Atria
Retail
Office
38,078
7,418
38,654
7,533
(1.5%)
(1.5%)
Ngee Ann City
Retail
Office (1)
37,408
10,332
37,955
11,189
(1.4%)
(7.7%)
Singapore
Australia (2)
Malaysia (3)
Others (4)
93,236
32,962
13,720
3,484
95,331
34,719
20,804
3,476
(2.2%)
(5.1%)
(34.1%)
0.2%
Total 143,402 154,330 (7.1%)
Total 137,679 141,433 (2.7%)
Notes:1. Mainly due to lower average occupancies and higher operating expenses.2. Mainly due to depreciation of A$ against S$ and lower contributions from Australia’s retail portfolio, partially offset by higher contributions from Australia’s office portfolio. In Australian
dollar terms, NPI declined by 2% y-o-y in YTD FY19/20.3. Mainly due to rental assistance for COVID-19 extended to master tenant and lower contributions from Starhill Gallery in relation to its planned asset enhancement. The impact on the
distributable income will be largely mitigated by the Manager receiving part of its base management fees in units during the asset enhancement period.4. Others comprise one property in Chengdu, China and two properties in Tokyo, Japan, as at 31 March 2020.
(excluding Starhill Gallery) (excluding Starhill Gallery)
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
$-
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
$0.90
Starhill Global REIT's Unit Price Movementand Daily Traded Volume
(1 Apr 2019 to 31 Mar 2020)
Trading Volume Unit Price
Tra
din
g V
olu
me
Un
it P
ric
e
Notes: 1. For the quarter ended 31 March 2020.2. Free float as at 31 March 2020. The stake held by YTL Group is approximately 37.3% as at 30 January 2020 while the stake held by AIA Group is 7.5% as at 29 August 2019.3. By reference to Starhill Global REIT’s closing price of $0.435 per unit as at 31 March 2020. The total number of units in issue as at 31 March 2020 is 2,186,900,678.
Liquidity statistics
Average daily traded
volume for 3Q FY19/20
(units)1
3.7 mil
Estimated free float2 ~55%
Market cap (S$)3 $951.3 mil
Unit price performance
12
Source: Shareinvestor
200
260
127
56
100
125
70 49
9
109
55
0
50
100
150
200
250
300
350
400
FY 2019/20 FY 2020/21 FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 FY 2025/26 FY 2026/27
$ millionDebt maturity profileAs at 31 March 2020
S$200m term loan S$260m term loan A$145m term loan A$63m term loan
S$100m MTN S$125m MTN S$70m MTN JPY3.7b term loan
JPY0.68b bond RM330m MTN S$55.3m RCF
Staggered debt maturity profile averaging 2.7 years as at 31 March 2020
13
Notes: 1. Comprises of short-term RCF outstanding as at
31 March 2020, which were drawn mainly for working capital purposes including part financing the ongoing asset enhancement works for Starhill Gallery.
2. In compliance with its financial covenants as at 31 March 2020.
3. A new S$2 billion multicurrency debt issuance programme was established in January 2020, which allows SGREIT to issue perpetual securities.
4. Interest coverage ratio is calculated for the 12 months ended 31 March 2020, as per the guidelines prescribed under the Property Funds Appendix issued by Monetary Authority of Singapore, which includes amortisation of upfront borrowing costs as interest expense, and base management fees payable/paid in units as deduction from the earnings before interest, tax, depreciation and amortisation.
5. Includes interest rate derivatives and benchmark rates but excludes upfront costs.
6. Includes interest rate derivatives such as interest rate swaps and caps.
Financial Ratios (2) 31 March 2020
Total debt (3) $1,160 million
Gearing 36.7%
Interest cover (4) 3.3x
Average interest rate p.a.(5) 3.25%
Unencumbered assets ratio 74%
Fixed/hedged debt ratio (6) 87%
Weighted average debt maturity 2.7 years
* Peak maturity 33% of total debt and 12% of total assets
*
(1)
Borrowings fixed/hedged via interest rate swaps
82.9%
Unhedged12.9%
Borrowings hedged via interest rate caps
4.2%
Interest rate and foreign exchange exposures
Interest rate exposure
Borrowings as at 31 March 2020 areabout 87% hedged
Of the above, 83% of the borrowings arehedged by a combination of fixed ratedebt and interest rate swaps, while 4%hedged are via interest rate caps
Foreign exchange exposure
Foreign currency exposure which accounts forabout 36% of revenue for 3Q FY19/20 arepartially mitigated by:
Foreign currency denominated borrowings(natural hedge);
Short-term FX forward contracts, whereappropriate
3Q FY19/20 GROSS REVENUE BY COUNTRY
BORROWINGS AS AT 31 MARCH 2020
14
Australia23.3%
Malaysia10.0%
Others2.4%
Singapore64.3%
Total assets of approximately $3.2 billion
15
As at 31 March 2020 $’000
Non Current Assets 3,062,130
Current Assets 97,298
Total Assets 3,159,428
Non Current Liabilities 1,051,041
Current Liabilities (2) 206,955
Total Liabilities 1,257,996
Net Assets 1,901,432
Unitholders’ Funds 1,901,432
NAVstatistics
NAV Per Unit (as at 31 March 2020) (1) $0.87
Closing price as at 31 March 2020 $0.435
Unit Price Premium/(Discount) To:
NAV Per Unit (50.0%)
Corporate Rating (Fitch Ratings)
BBB/Stable
Notes:1. The computation of NAV per unit is based on 2,191,773,265 units which comprise (i) 2,186,900,678 units in issue as at 31 March 2020, and (ii) estimated 4,872,587
units issuable as partial satisfaction of management fees for 3Q FY19/20.
2. As at 31 March 2020, the S$100 million Singapore MTN maturing in February 2021 and S$55.3 million revolving credit facilities were classified as current liabilities.The Group has available undrawn long-term committed revolving credit facilities to cover the net current liabilities of the Group, including the maturing MTN.
16
2 Portfolio Performance Update
Myer Centre AdelaideAdelaide, Australia
Balance of master / anchor leases and actively-managed leases
Master leases and anchor leases, incorporating periodic
rent reviews, represent approximately 49.0% of gross rent
as at 31 March 2020Ngee Ann City Property Retail (Singapore)The Toshin master lease expires in 2025 andprovides for a review of the rental rate every three years during its term. Next rent review in June 2022
Starhill Gallery & Lot 10 (KL, Malaysia)New master tenancy agreements commenced in June 2019 and have long tenures of approximately 19.5 years and 9 years(1) for Starhill Gallery and Lot 10 Property respectively
David Jones Building (Perth, Australia)Expires in 2032. Next rent review in August 2020
Myer Centre (Adelaide, Australia)Expires in 2032
17
Master leases / anchor leases,
with periodic rent reviews, 49.0% (2)
Actively-managed leases, 51.0%
Notes:1. Assuming that the option to renew for the third three-year term for Lot 10 Property is exercised. 2. Excludes tenants’ option to renew or pre-terminate.
Includes the following: -
Retail portfolio actual occupancy rate resilient at 97.5%
18
As at 31 Dec
0731 Dec
0831 Dec
0931 Dec
1031 Dec
1131 Dec
12 31 Dec
1330 Jun
1530 Jun
1630 Jun
1730 Jun
1830 Jun
1931 Mar
20
SG Retail 100.0% 98.3% 100.0% 99.1% 98.3% 99.8% 99.9% 99.4% 99.2% 99.2%98.7%
(99.1%)
99.4%
(99.4%)
99.5%
(99.5%)
SG Office 98.7% 92.4% 87.2% 92.5% 95.3% 98.3% 99.0% 99.3% 95.6% 92.9%90.3%
(95.0%)
93.2%
(93.9%)
87.4%
(91.4%)
Singapore 99.5% 96.0% 95.1% 96.5% 97.1% 99.2% 99.5% 99.3% 97.9% 96.8% 95.5% 97.0% 94.8%
Japan 100.0% 97.1% 90.4% 86.7% 96.3% 92.7% 89.8% 96.1% 100.0% 100.0% 100.0% 100.0% 100.0%
China 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 96.4% 100.0% 100.0% 100.0% 100.0%
Australia - - - 100.0% 100.0% 100.0% 99.3% 96.2% 89.7% 91.1% 88.8% 92.8% 94.3%
Malaysia - - - 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
SG REIT
portfolio99.6% 96.6% 95.4% 98.2% 98.7% 99.4% 99.4% 98.2% 95.1% 95.5% 94.2% 96.3% 96.3%
Notes: 1. Based on commenced leases as at reporting date. For prior years, the reported occupancy rates were based on committed leases, which include leases that have
been contracted but have not commenced as at the reporting date.2. Based on committed leases as at reporting date.
(1)
(1)
(2)
(1)
(2)
(2)(2)
(1)
(2)
(2)
(1) (1)
Top 10 tenants contribute 57.3% of portfolio gross rents
Notes: 1. As at 31 March 2020.2. The total portfolio gross rent is based on the gross rent of all the properties.3. Consists of Katagreen Development Sdn. Bhd., YTL Singapore Pte. Ltd., YTL Hotel (Singapore) Pte. Ltd., YTL Starhill Global REIT Management Limited
and YTL Starhill Global Property Management Pte. Ltd.
19
Tenant Name Property % of Portfolio Gross Rent (1) (2)
Toshin Development Singapore Pte Ltd Ngee Ann City, Singapore 22.2%
YTL Group (3) Ngee Ann City & Wisma Atria, SingaporeStarhill Gallery & Lot 10, Malaysia
15.5%
Myer Pty Ltd Myer Centre Adelaide, Australia 6.4%
David Jones Limited David Jones Building, Australia 4.2%
BreadTalk Group Wisma Atria, Singapore 2.2%
Coach Singapore Pte Ltd Wisma Atria, Singapore 1.6%
LVMH Group Wisma Atria, Singapore 1.5%
Charles & Keith Group Wisma Atria, Singapore 1.3%
Tory Burch Singapore Pte Ltd Wisma Atria, Singapore 1.3%
Emperor Watch & Jewellery Wisma Atria, Singapore 1.1%
2.3%7.8% 6.5%
4.0%
79.4%
4.5%
15.1% 14.6%
8.5%
57.3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
FY19/20 FY20/21 FY21/22 FY22/23 Beyond FY22/23
Portfolio lease expiry (as at 31 March 2020) (2)(3)
By NLA By Gross rent
Staggered portfolio lease expiry profile
Weighted average lease term of 8.9 and 5.7 years (by NLA and gross rent respectively)
Notes:1. Excludes tenants’ option to renew or pre-terminate. 2. Lease expiry schedule based on commenced leases as at 31 March 2020.3. Portfolio lease expiry schedule includes all of SGREIT’s properties. 4. Includes the Toshin master lease, master tenancy agreements for Malaysia Properties and the anchor leases in Australia and China.5. Assuming that the option to renew for the third three-year term for Lot 10 Property is exercised.
20
(4)(5)
(1) (1)
(4)(5)
4.0%
13.2% 12.9%
7.0%
62.9%
0%
10%
20%
30%
40%
50%
60%
70%
FY19/20 FY20/21 FY21/22 FY22/23 BeyondFY22/23
Retail Lease Expiry Profile by Gross Rents(as at 31 March 2020) (1)(2)(3)
Staggered portfolio lease expiry profile by category
Notes:1. Based on commenced leases as at 31 March 2020.2. Includes all of SGREIT’s retail properties. 3. Excludes tenants’ option to renew or pre-terminate. 4. Includes the Toshin master lease, master tenancy agreements for Malaysia Properties and the anchor leases in Australia and China.5. Assuming that the option to renew for the third three-year term for Lot 10 Property is exercised.6. Comprises Wisma Atria, Ngee Ann City and Myer Centre Adelaide office properties only.
21
(4)(5)
8.1%
27.4%25.0%
18.0%
21.5%
0%
10%
20%
30%
40%
50%
FY19/20 FY20/21 FY21/22 FY22/23 BeyondFY22/23
Office Lease Expiry Profile By Gross Rents(as at 31 March 2020) (1)(3)(6)
Singapore Retail (Wisma Atria & Ngee Ann City)Continues to attract niche brands to its prime location
Singapore Retail
Revenue and NPI for 3Q FY19/20 declined by 5.4% and 5.3% y-o-y respectively
Wisma Atria: Tenant sales and footfall traffic in 3Q FY19/20 fell 15.4% and 20.4% y-o-y respectively due to strict social distancing measures and lower tourist arrivals
22
Japan bridal rings boutique Venus Tearsopened at Wisma Atria in February 2020
$20
$25
$30
$35
$40
$45
$50
$55
$60
Jan-Mar2018
Apr-Jun2018
Jul-Sep2018
Oct-Dec2018
Jan-Mar2019
Apr-Jun2019
Jul-Sep2019
Oct-Dec2019
Jan-Mar2020
Wisma Atria Retail Tenant SalesS$ million
Re
tail
Sa
les
Tu
rno
ver
Singapore’s leading sneaker boutique Limited EDT Chamber opened at Wisma Atria in March 2020
in xx
10.5%
28.3%33.2%
17.8%10.2%
0.0%4.0% 4.7% 1.3%
90.0%
0%
20%
40%
60%
80%
100%
FY19/20 FY20/21 FY21/22 FY22/23 Beyond FY22/23
Wisma Atria Property
Ngee Ann City Property
(1)
Singapore RetailOccupancy remains resilient amidst strict social distancing measures to curb COVID-19 infections
Lease expiry schedule (by gross rent) as at 31 March 2020
Proactive leasing
Singapore Retail was 99.5%(2)
occupied on an actual basis as at 31 March 2020
• Ngee Ann City Property (Retail) is fully occupied(2)
as at 31 March 2020
Occupancy rates (by NLA)(2)
23
Includes Toshin master lease at Ngee Ann City Property
91.7%
99.6% 99.0% 100.0% 98.4%100.0% 99.3% 100.0% 99.4% 100.0%
50%
60%
70%
80%
90%
100%
31-Mar-19 30-Jun-19 30-Sep-19 31-Dec-19 31-Mar-20
Wisma Atria Property Ngee Ann City Property
Notes:1. Includes the master tenancy lease with Toshin
Development Singapore Pte Ltd which expires in 2025.2. Based on commenced leases as at reporting date.
Longchamp at Wisma Atria Property
Singapore OfficesDiversified tenant base
24
3Q FY19/20 revenue and NPI was lower by 6.5% and 7.9% y-o-y respectively
Actual occupancy was 87.4%(1) as at 31 March 2020 compared to 89.2%(1) as at 31 December 2019. On a committed basis, occupancy was 91.4%(2) as at 31 March 2020
However, Wisma Atria Property (Office) saw actual occupancy rising to 92.0%(1) as at 31 March 2020 from 91.3%(1) as at 31 December 2019
Notes:1. Based on commenced leases as at reporting date.2. Include leases that have been contracted but have not commenced as at the reporting date.
The Great Room at Ngee Ann City Property Embraer at Ngee Ann City Property
Valentino at Wisma Atria Property
88.5% 89.3% 87.7%91.3% 92.0%
97.2% 95.9% 97.7%
87.7%84.2%
50%
60%
70%
80%
90%
100%
31-Mar-19 30-Jun-19 30-Sep-19 31-Dec-19 31-Mar-20
Wisma Atria Property
Ngee Ann City Property
Singapore Offices
Lease expiry schedule (by gross rent) as at 31 March 2020
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Note:1.Based on commenced leases
as at reporting date.
Occupancy rates (by NLA)(1)
6.6%
37.9%
20.7%
27.6%
7.2%10.6%
24.7%
34.0%
13.9%16.8%
0%
10%
20%
30%
40%
50%
FY19/20 FY20/21 FY21/22 FY22/23 Beyond FY22/23
Wisma Atria Property
Ngee Ann City Property
3.6%12.3%
0.7%5.8%
77.6%
2.8%10.3% 7.2% 5.4%
74.3%
-10%
10%
30%
50%
70%
90%
FY19/20 FY20/21 FY21/22 FY22/23 Beyond FY22/23
Perth Properties Myer Centre Adelaide
Australia PropertiesLong-term leases with David Jones and Myer
Occupancy rates (by NLA)(1)
Lease expiry schedule (by gross rent) as at 31 March 2020 (1)(2)
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Revenue and NPI for 3Q FY19/20 declined by 4.2% and 8.5% y-o-y respectively, mainly due to the depreciation of A$ against S$ as well as lower contributions from Australia’s retail portfolio including allowance for rental arrears, partially offset by higher contributions from the Australia’s office portfolio
Actual occupancy of Australia’s office portfolio has improved slightly to 94.8%(1) as at 31 March 2020 from 94.5%(1) as at 31 December 2019
Actual occupancy for the Australia retail portfolio stood at 94.3%(1)
as at 31 March 2020
David Jones’ and Myer’s long term leases account for 21.7% and 33.1% of Australia portfolio by gross rent respectively as at 31 March 2020
Notes: 1. Based on commenced leases as at reporting date.2. Excludes tenants’ option to renew or pre-terminate.3. Includes the long-term lease with David Jones Limited which is subject to periodic rent reviews and expires in 2032.4. Includes the long-term lease with Myer Pty Ltd which is subject to periodic rent reviews and expires in 2032.
(3)(4)
97.6% 97.4% 97.6% 98.0% 97.8%
89.9% 90.7% 90.0%92.6% 92.6%
60%
70%
80%
90%
100%
31-Mar-19 30-Jun-19 30-Sep-19 31-Dec-19 31-Mar-20
Perth Properties Myer Centre Adelaide
Malaysia – Starhill Gallery and Lot 10 PropertyLong-term leases with rental step-ups under renewed master lease agreements
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Revenue and NPI in 3Q FY19/20 were lower by 32.8% and 34.0% respectively over 3Q FY18/19, mainly due to the rental rebate extended to the master tenant during the asset enhancement period of Starhill Gallery
The impact of this on the distributable income will be largely mitigated by the Manager receiving part of its base management fees in units(1)
The impact to the revenue and NPI in 3Q FY19/20 was also due to some rental assistance extended to the master tenant to assist the retail sub-tenants impacted by the Movement Control Order due to COVID-19 pandemic
Artist’s impression of Starhill Gallery façade facing Jalan Bukit Bintang
Improved accessibility with the completion of the new Bukit Bintang MRT Station
Note: 1. Please refer to the Circular to Unitholders dated 25 April 2019 for
more information.
Revenue and NPI for 3Q FY19/20 was 3.7% and 7.2% lower compared to 3Q FY18/19 respectively mainly due to rental assistance offered to the tenant in China in March 2020
China Property has a sole tenant, Markor International Home Furnishings Co., Ltd. Chengdu Zongbei Store, which is one of the largest furniture retailers in China
In Japan, both assets maintained full actual occupancy(1) as at 31 March 2020
OthersChina Property and Japan Properties
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Daikanyama Ebisu Fort
China Property
Note: 1. Based on commenced leases as at reporting date.
3 Outlook
Lot 10Kuala Lumpur, Malaysia
Market review
Singapore
– Based on advanced estimates, Singapore’s economy contracted by 2.2% y-o-y in the firstquarter of 2020. On a q-o-q seasonally adjusted annualised basis, the economy shrank by10.6%
– Singapore’s gross domestic product forecast for 2020 has been further downgraded to -4.0%to -1.0%
– Consumer spending was hit as retail sales (excluding motor vehicles) declined by 10.2% y-o-yin February 2020
– Singapore Tourism Board expects visitor arrivals in 2020 to fall by about 25% to 30%
– International visitor arrivals in February 2020 plunged by 51.2% y-o-y, following significantlytighter border controls since February 2020
Australia
– A significant economic contraction is expected in the June quarter and the unemployment rateis expected to increase to its highest level in years
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Sources: Ministry of Trade and Industry Singapore, Singapore Department of Statistics, Singapore Tourism Board, Reserve Bank of Australia
Updates in view of COVID-19 pandemic
Global
– The unprecedented COVID-19 pandemic has adversely impacted many industries worldwideincluding the retail sector and created significant uncertainty in global economic prospects andthe Group’s operating environment. Globally, many Governments have implemented measuresto contain the spread
– Our assets in Singapore and Malaysia have encountered movement restriction orders whileretail tenants in Australia and China were impacted by stricter social distancing measures andlower tourist arrivals
Singapore
– The ‘circuit breaker’ measures announced by the Singapore Government on 3 April 2020 havebeen extended for another four weeks until 1 June 2020 and tighter measures are beingimplemented to curb the spread of COVID-19 infections. Wisma Atria Property and Ngee AnnCity Property are open only for some essential services between 7 April 2020 and 1 June 2020
– A new temporary law, COVID-19 (Temporary Measures) Act, was passed in April 2020 whichallows tenants to defer their rent payments for an initial period of six months, if they satisfycertain conditions set out in the Act. The rental payments of affected tenants may potentially bedeferred during this period
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Updates in view of COVID-19 pandemic
Australia
– While David Jones remains open, most of our tenants including Myer and UNIQLO havechosen to temporarily close their stores in response to heightened social distancing measures.Myer has been closed since 29 March 2020 and will remain so until at least 11 May 2020
Malaysia
– Starhill Gallery and Lot 10 Property have largely closed since Movement Control Order (MCO)kicked in on 18 March 2020
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Note:1. Property tax rebate as per the Budget 2020 announced by the Singapore Government on 18 February 2020 and the Resilience Budget announced on 26 March 2020
Ensure long-term partnership with tenants by helping them mitigate business disruption
– Rental rebates amounting to ~S$13.7 million were extended in phases to tenants inSGREIT, of which ~S$10.8 million relate to the property tax rebate to be received from theSingapore Government1 which will be passed on fully to our tenants in Singapore
– Currently evaluating partial rental rebate and deferments for our tenants in Australia basedon the Mandatory Code of Conduct for landlords and tenants released by the NationalCabinet of Australia
– SGREIT’s Australia portfolio contributed 18.2% to the Group’s NPI in 3Q FY19/20
Social distancing measures at our mall and offices
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Floor markings in front of food and beverage stalls for social distancingRestricted entry at basement entrance of Wisma Atria to reduce crowding in the mall
Temperature screenings for contractors Restricted entry at Wisma Atria entrances Only takeaway and delivery is allowed at food and beverage outlets
Notices and floor markings in lifts
Prudent and defensive strategy
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Maintain financial flexibility
– Undertake cost-saving measures, including a 10% reduction in the base managementfees payable by SGREIT for three months effective from April 2020, and delay non-essential capital expenditures
– Switch to semi-annual distributions to achieve cost savings and greater financialflexibility
Prudent capital management
– The Group does not have any debt maturities in the next 12 months, save for S$100million medium term notes due in February 2021 and some short-term debts drawnunder its revolving credit facilities
– Additionally, the Group has available undrawn committed revolving credit facilities whichis in excess of maturing debts and can be drawn down to fund its working capitalrequirements
– The Group’s gearing level is at 36.7% as at 31 March 2020
Prudent and defensive strategy
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Adopt a cautious approach
– The COVID-19 pandemic which has caused intensified social distancing measures in our coremarkets is expected to have a significant adverse impact on Starhill Global REIT’s financialperformance, income available for distribution and cashflow for the remaining period of thefinancial year ending 30 June 2020
– Consumption spending on discretionary items and retail sales are likely to take a further hit asstay at home measures come into effect, along with the barring of international visitors and socialdistancing measures in malls(1)
– Rental decline is expected to accelerate next quarter, as landlords face increasing pressure tostrike the balance between occupancy and rents(1)
– Tenant sales and shopper traffic are expected to decline substantially in the next quarter followingstrict social distancing and ‘circuit breaker’ measures as well as lower tourist arrivals
– Tenant relief measures will also impact revenue contribution from the Group’s retail portfolio
– Valuation of investment properties will be subject to significant uncertainty given the constantlyevolving impact from COVID-19 pandemic
– Given the fluidity of the COVID-19 pandemic, the full impact cannot be ascertained at thisjuncture. The Manager will closely monitor the COVID-19 situation and work proactively with thetenants to tide through this difficult period
Note:1. CBRE Research, Singapore MarketView Q1 2020, Cold feet from COVID-19, 17 April 2020
Looking ahead
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FY 2019/20 (June ’20)
Completion
Myer Centre Adelaide: Annual rent review for key tenant Myer
FY 2020/21 (June ’21) and beyond
Organic growth from rental reversion
3Q FY 2019/20 (March ’20)
Optimising returns with asset enhancements
Creating value through opportunistic acquisitions & divestments
SGREIT continues to refine its portfolio and explore potential asset management initiatives and acquisition opportunities
David Jones: Upward-only lease review secured in August 2017
Toshin: Master lease in Ngee Ann City Retail provides for a review of the rental rate every three years during its term until 2025. Next rent review in June 2022
Plaza Arcade: Annual rent review for anchor tenant UNIQLO
Katagreen: Commencement of new master tenancy agreements in June 2019, with lease tenures of 19.5 years and 9 years(1)
for Starhill Gallery and Lot 10 Property respectively, with periodic rent step-ups
Starhill Gallery: Asset enhancement works has commenced and are expected to take approximately 2 years
Note:1. Assuming that the option to renew for the third three-year term for Lot 10 Property is exercised.
Next rent review in August 2020
China Property: Next rent step-up in April 2020 for sole tenant Markor International Home Furnishings Co., Ltd. Chengdu Zongbei Store
Summary
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Quality Assets:
Prime Locations
10 mid- to high-end retail properties in five countries
- The core markets are Singapore, which makes up about 69.1% of total asset value, as well as Australia and Malaysia which make up about 27.9% of total asset value. China and Japan account for the balance of the portfolio
Quality assets with strong fundamentals located strategically
Strong Financials: Financial Flexibility
Stable gearing at 36.7%
SGREIT’s corporate rating of ‘BBB’ with stable outlook
Establishment of a new S$2 billion multicurrency debt issuance programme in January 2020
Developer Sponsor:
Strong Synergies
Strong synergies with the YTL Group, one of the largest companies listed on the Bursa Malaysia, which has a combined market capitalisation of US$5.3 billion together with four listed entities in Malaysia as at 28 February 2020
Track record of success in real estate development and property management in Asia Pacific region
Management Team: Proven Track Record
Demonstrated strong sourcing ability and execution by acquiring 5 quality malls over the last 11 years
- Myer Centre Adelaide (Adelaide, Australia), DJ Building and Plaza Arcade (Perth, Australia), Starhill Gallery and Lot 10 (Kuala Lumpur, Malaysia)
Asset redevelopment of Wisma Atria, Lot 10, Plaza Arcade and China Property demonstrates the depth of the manager’s asset management expertise
International and local retail and real estate experience
Appendices
Starhill GalleryKuala Lumpur, Malaysia
~69.1% of total asset value attributed to Singapore
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3Q FY19/20 GROSS REVENUE RETAIL/OFFICE
*Others comprise one property in Chengdu, China, and two properties located in central Tokyo, Japan, as at 31 March 2020.
Retail 85.2%
Office14.8%
Singapore64.3%
Australia23.3%
Malaysia10.0%
Others*2.4%
Singapore69.1%
Australia14.9%
Malaysia13.0%
Others*3.0%
ASSET VALUE BY COUNTRY AS AT 31 MAR 2020
3Q FY19/20 GROSS REVENUE BY COUNTRY
Singapore – Wisma Atria PropertyDiversified tenant base
WA retail trade mix – by % gross rent(as at 31 March 2020)
WA office trade mix – by % gross rent(as at 31 March 2020)
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Real Estate & Property Services22.7%
Retail20.2%
Medical16.4%
Trading12.5%
Consultancy/ Services
7.2%
Others7.1%
Government-related
services4.1%
Banking & Financial Services
3.1%
IT2.8%
Aerospace2.6% Beauty/Health
1.3%
Fashion25.1%
F&B25.0%
Shoes & Accessories
18.1%
Jewellery & Watches13.0%
Health & Beauty12.6%
General Trade6.2%
Singapore – Ngee Ann City Property Stable of quality tenants
NAC office trade mix – by % gross rent(as at 31 March 2020)
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Toshin87.1%
Health & Beauty9.8%
Services2.5%
General Trade0.6%
Real Estate & Property Services23.3%
Retail19.9%
Health & Beauty11.8%
Banking and Financial Services11.4%
Petroleum-related9.6%
Medical 5.6%
Aerospace4.9%
Others4.8%
Consultancy/ Services
4.2%
Trading2.6%
Information Technology
1.9%
NAC retail trade mix – by % gross rent(as at 31 March 2020)
References used in this presentation
1Q, 2Q, 3Q, 4Q means where applicable, the periods between 1 July to 30 September; 1 October to 31 December; 1 January to 31 March and 1 April to 30 June
3Q FY19/20 means the period of 3 months from 1 January 2020 to 31 March 2020
3Q FY18/19 means the period of 3 months from 1 January 2019 to 31 March 2019
YTD FY19/20 means the period of 9 months from 1 July 2019 to 31 March 2020
YTD FY18/19 means the period of 9 months from 1 July 2018 to 31 March 2019
DPU means distribution per unit
FY means the financial year
GTO means gross turnover
IPO means initial public offering (Starhill Global REIT was listed on the SGX-ST on 20 September 2005)
NLA means net lettable area
NPI means net property income
pm means per month
psf means per square foot
WA and NAC mean the Wisma Atria Property (74.23% of the total share value of Wisma Atria) and the Ngee Ann City Property (27.23% of the total share value of Ngee Ann City) respectively
All values are expressed in Singapore currency unless otherwise stated
Note: Discrepancies in the tables and charts between the listed figures and totals thereof are due to rounding
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Disclaimer
This presentation has been prepared by YTL Starhill Global REIT Management Limited (the “Manager”), solely in its capacity as Manager of Starhill Global Real Estate Investment Trust (“Starhill Global REIT”). A press release, together with Starhill Global REIT’s unaudited financial statements, have been posted on SGXNET on the same date (the “Announcements”). This presentation is qualified in its entirety by, and should be read in conjunction with the Announcements posted on SGXNET. Terms not defined in this document adopt the same meanings in the Announcements.
The information contained in this presentation has been compiled from sources believed to be reliable. Whilst every effort has been made to ensure the accuracy of this presentation, no warranty is given or implied. This presentation has been prepared without taking into account the personal objectives, financial situation or needs of any particular party. It is for information only and does not contain investment advice or constitute an invitation or offer to acquire, purchase or subscribe for Starhill Global REIT units (“Units”). Potential investors should consult their own financial and/or other professional advisers.
This document may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions.
Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate and foreign exchange trends, cost of capital and capital availability, competition from similar developments, shifts in expected levels of property rental income, changes in operating expenses (including employee wages, benefits and training costs), property expenses and governmental and public policy changes. Investors are cautioned not to place undue reliance on these forward-looking statements, which are based on the Manager’s view of future events.
The past performance of Starhill Global REIT is not necessarily indicative of the future performance of Starhill Global REIT. The value of Units and the income derived from them may fall as well as rise. The Units are not obligations of, deposits in, or guaranteed by, the Manager or any of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested. Investors have no right to request that the Manager redeem their Units while the Units are listed. It is intended that unitholders of Starhill Global REIT may only deal in their Units through trading on the SGX-ST. Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units.
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YTL Starhill Global REIT Management LimitedCRN 200502123C
Manager of Starhill Global REIT
391B Orchard Road, #21-08
Ngee Ann City Tower B
Singapore 238874
Tel: +65 6835 8633
Fax: +65 6835 8644
www.starhillglobalreit.com
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