Starhill Global REIT - DBS Research 2024-08-08: Pencilling In Stronger Retail Reversions

• Starhill Global REIT (SGX:P40U)'s top line gross revenue for 2HFY23/24 rose 2.3% y-o-y to S$95.2mil, while NPI rose 1.3% y-o-y to S$74.5mil. Correspondingly, full year gross revenue and NPI rose 1.1% and 0.8% y-o-y, respectively, to S$189.8mil and S$149mil.

FY2023/2024 results - DPU slightly below estimates.

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• On the expense side, full year finance expenses rose ~9% y-o-y, and a one-off leasing commission fee for Toshin’s master lease renewal (approximating ~0.25 months’ worth of rent at >S$1mil) was also reflected in this financial year.
• Full year FY23/24 Starhill Global REIT's DPU declined 4.5% y-o-y to 3.63 cents, falling behind our estimate of 3.85 cents.

Decline in Singapore per basket spend.

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• Full year revenue contribution from Australia rose 2.0% y-o-y, while Malaysia income declined 5.1% y-o-y primarily on forex translation.
• Portfolio occupancy remains stable at 97.7% as of end-FY23/24, a 0.3ppt q-o-q decline. 2H24 tenant sales and shopper traffic at Wisma Atria rose 2.8% and 8.2% y-o-y. Similar to operational trends reported by the retail landlords, the phenomena of a decline in per basket spend, where shopper traffic tracks ahead of tenant sales recovery, may be something to watch in the coming quarters.
• On a full year basis, reversionary rents from Singapore landed within the mid-to-high positive single-digit range.

Portfolio valuation stable on strong rental growth in SG.

• Read more at SGinvestors.io.

Geraldine WONG DBS Group Research | Derek TAN DBS Research | https://www.dbs.com/insightsdirect/ 2024-08-08 SGinvestors.io

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