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Starhill Global REIT stays vigilant and flexible to meet Covid-19 headwinds — Francis Yeoh

KUALA LUMPUR (Sept 24): In view of the uncertainty and fluidity brought by the Covid-19 pandemic, Starhill Global Real Estate Investment Trust (Starhill Global REIT) will continue to stay vigilant and flexible in its approach to preserve balance sheet strength and liquidity to mitigate any potential short term disruption to revenue, said its chairman Tan Sri Francis Yeoh Sock Ping (pictured).

In the REIT's latest annual report filed with Singapore Exchange, Yeoh said that it remains difficult to ascertain the full impact of the pandemic on its business in light of the fluidity of Covid-19, hence it will continue to be vigilant, assess the constantly changing environment and respond appropriately.

"Nonetheless, our core strategies, which enabled us to navigate through the difficult period last year, will remain," he said.

"We are also conscious of our core responsibilities to deliver value for our unitholders over the longer term and on a sustainable basis," he noted.

At this juncture, Yeoh said the REIT's primary focus is to ensure the portfolio remains relevant.

"We have strengthened our balance sheet and liquidity over the past year and embarked on various renovation works during the current downtime so as to be ready when the economy recovers. Once vaccination rates rise, business will recover progressively and we intend to emerge stronger out of this," Yeoh stated.

Amidst the current pandemic, Yeoh said new completions of retail in Singapore will be significantly lower, with the average annual supply estimated to be slightly over 300,000 square feet (sq ft) between 2021 and 2023.

"This will be approximately 30% of the average annual completion of retail space supply between 2016 and 2020, at 1.1 million sq ft NLA (net lettable area). Orchard Road and the Rest of Central micro-markets will account for just 3.1% and 5.3% of the future supply respectively," he added.

Yeoh said the average annual island-wide office supply in Singapore is projected at 1.1 million sq ft NLA between 2021 and 2023, which is below the average annual completion rate of 1.7 million sq ft NLA for the historical five-year period.

Opportunities emerge for Starhill Global REIT from improving infrastructure projects

"Aside from supply and demand dynamics, upcoming infrastructure developments should benefit our portfolio. The Thomson-East Coast MRT line will improve the connectivity of Orchard Road's commercial buildings. Stages one and two have recently been completed and stage three of the new MRT (Mass Rapid Transit) line, which links Orchard and the Central Business District, is scheduled for completion in 2022. Stage four, which links the East Coast population catchment, is scheduled to be completed by 2024 and will bring new vibrancy and accessibility to Orchard," Yeoh said.

In Kuala Lumpur, Malaysia, the new Putrajaya Line (phase one) is expected to begin operations in November 2021 while the rest of the extensive 57.7km line is expected to be operational by January 2023.

The new MRT line, coupled with upcoming mega commercial projects such as Tun Razak Exchange and Bukit Bintang City Center Signature Tower (BBCC), is expected to bring new vibrancy to the city and improve traffic flow in the central areas, he noted.

"As opportunities emerge from improving infrastructure, we will explore and evaluate asset enhancement initiatives for our portfolio. We will also continue to search for yield-accretive acquisition opportunities in key cities and diversify our income to other commercial sectors such as office assets," he added.

Starhill Global REIT owns The Starhill and Lot 10 Property in Kuala Lumpur.

Starhill Global REIT is a wholly-owned subsidiary of YTL Starhill Global REIT Management Holdings Pte Ltd, which is in turn an indirect subsidiary of Malaysia-listed YTL Corp Bhd.

At the Singapore bourse today, Starhill Global REIT units were unchanged at S$0.64 at 3.15pm for a total market capitalisation of S$1.42 billion.

On Bursa Malaysia today, YTL Corp's share price fell 0.5 sen or 0.81% to 61.5 sen, yielding it a market capitalisation of RM6.78 billion.

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