Starhill Global REIT had announced their 1HFY22/23 financial results on 27th January 2023. The financial results are largely positive. The most important thing is that a Distribution per Unit (DPU) of 1.82 cents was also declared which should make investors collecting passive income happy.
Let us take a deeper look into its financial results.
1HFY22/23 Financial Results
Gross Revenue was S$94.7 million in the first half year ended 31 December 2022 (1H FY22/23) as compared to S$91.0 million in the previous corresponding period of first half year ended 31 December 2021 (1H FY21/22).
Net property income (NPI) increased by 6.7% y-o-y, rising to S$74.3 million in 1H FY22/23 from S$69.6 million in 1HFY21/22. The increase in Net property income (NPI) was attributed to the completion of asset enhancement works at The Starhill, lower rental assistance and higher rental contribution from Singapore Office, partially offset by lower rental contribution from Wisma Atria (Property) Retail and net movement in foreign currencies.
| 1HFY22/23 (S$’mil) | 1HFY21/22 (S$’mil) | YoY(%) | |
| Gross Revenue | 94.7 | 91.0 | 4.1% |
| Net Property Income | 74.3 | 69.6 | 6.7% |
| Income available for distribution | 43.6 | 42.7 | 2.2% |
| Income to be distributed to Unitholders | 40.9 | 39.7 | 3.0% |
| Distribution per Unit (cents) | 1.82 | 1.78 | 2.2% |
Occupancy
Overall portfolio occupancy stood at 97.1%.
As of 31st December 2023, the occupancy for Singapore retail portfolio stood at 99.6%. The Singapore office portfolio occupancy stood at 96.3% which was a large improvement as compared to previous quarters.
Debt
As of 31st December 2022, gearing stood at 36.3%. Weighted average debt maturity stood at 3.0 years.
If you are concern about Starhill Global REIT’s interest rate exposure, there is little to worry as the borrowings as at 31 December 2022 are about 84% fixed/hedged. The borrowings are hedged by a combination of fixed rate debt and interest rate swaps.
Foreign currency exposure which accounts for about 39% of revenue for 1H FY22/23 are partially mitigated by foreign currency denominated borrowings
(natural hedge) and short-term FX forward contracts.
Current Dividend Yield
Based on the current share price of S$0.59 and FY21/22 distribution of 3.80 cents, this translate to a current dividend yield of 6.44%.
Summary of Starhill Global REIT 1HFY22/23 Financial Results
Both the retail and office segment has benefited from the COVID-19 recovery. This can be seen from the improved office occupancy rates and increased shopper traffic at Wisma Atria. I am glad that the Wisma Atria rejuvenation works have been largely completed. The bubble lift upgrades are expected to be completed in February 2023.
Singapore island wide retail rents are expected to continue recovering in 2023 given the relaxation of border measures in China and tight retail supply, despite challenges to retailers such as rising labour costs, increase in the Goods and Services Tax (GST) and higher operating costs