Annual Report Fy 2018/19
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ANNUAL REPORT FY 2018/19 About Starhill Global REIT Starhill Global REIT is a Singapore-based real estate investment trust investing primarily in real estate used for retail and office purposes, both in Singapore and overseas. Since its listing on the Mainboard of the Singapore Exchange Securities Trading Limited on 20 September 2005, Starhill Global REIT has grown its initial portfolio from interests in two landmark properties on Orchard Road in Singapore to 10 properties in Singapore, Australia, Malaysia, China and Japan, valued at about S$3,064.9 million as at 30 June 2019. These comprise interests in Wisma Atria and Ngee Ann City on Orchard Road in Singapore; Myer Centre Adelaide, David Jones Building and Plaza Arcade in Adelaide and Perth, Australia; Starhill Gallery and Lot 10 Property in Kuala Lumpur, Malaysia; a retail property in Chengdu, China, and two properties in Tokyo, Japan. Starhill Global REIT remains focused on sourcing attractive property assets in Singapore and overseas, while driving organic growth from its existing portfolio through proactive leasing efforts and creative asset enhancements. Starhill Global REIT is managed by an external manager, YTL Starhill Global REIT Management Limited. The Manager is a wholly-owned subsidiary of YTL Starhill Global REIT Management Holdings Pte. Ltd. which is in turn an indirect subsidiary of YTL Corporation Berhad. VISION To be the preferred real estate investment trust with a stable of high-quality and valuable income-generating assets. MISSION To deliver long-term sustainable returns to our Unitholders VALUES through growth and value The values to which creation in our assets, backed by we aspire can be prudent capital management. summarised under six principles: To be a landlord of choice for – Integrity our tenants and shoppers. – Client Commitment – Strive for Profitability To be a forward-thinking – Fulfilment for our People real estate company with – Teamwork strong management expertise. – Highest Standards All rights reserved. Discrepancies in the ONLINE ANNUAL REPORT FY 2018/19 tables and charts between the listed figures www.starhillglobalreit.com/ir_ar.html and totals thereof are due to rounding. Making Waves for the Future With a strong foundation built over the years, we take bold steps to reinvent ourselves to stay ahead of the competition and to capture new opportunities. OVERVIEW OPERATIONS REVIEW SUSTAINABILITY & GOVERNANCE Our Strategy 02 Property Highlights 28 Sustainability Report 62 Key Highlights 03 Property Portfolio Summary 30 Corporate Governance 80 Our Signature Style 04 Singapore Properties 34 Our Tailored Approach 06 Australia Properties 40 FINANCIALS Our Attractive Footprint 08 Malaysia Properties 46 Financial Statements 93 Our Geographical Reach 10 China Property 50 Our Business in Brief 12 Japan Properties 51 Key Figures for 5 Years 14 OTHERS Financial Summary 15 Statistics of Unitholders 151 PERFORMANCE Letter to Unitholders 16 Additional Information 153 Market Overview 52 Trust Structure 19 Glossary 154 Financial Review 54 Significant Events in FY 2018/19 20 Corporate Directory 156 Capital Management 58 Board of Directors 22 Notice of Annual General Meeting 157 Risk Management 60 Executive Officers of 24 Proxy Form 163 REIT Manager Investor Relations 61 and Communications Executive Officers of 26 Property Manager Our Strategy Starhill Global REIT remains focused on sourcing attractive property assets in Singapore and overseas, while driving organic growth from its existing portfolio through proactive leasing efforts and creative asset enhancements, and maintaining a prudent capital management approach. ACTIVE ASSET MANAGEMENT • Balance of master tenancies • Focusing on mid- to high- and anchor leases, coupled end retail tenant base and with actively managed optimising tenant mix short- to medium-term tenancies for income • Unlocking value stability with potential through creative asset rental upside enhancements • Driving organic growth from • Maintaining healthy existing portfolio through and sustainable proactive leasing efforts occupancy rates through economic cycles ACQUISITION GROWTH • Investment portfolio • Long-term yield accretive primarily comprising prime investments made in real estate used mainly for Singapore and overseas retail and/or office purposes markets with strong fundamentals and strategic locations CAPITAL MANAGEMENT • Managing capital to optimise • Employing appropriate Unitholders’ returns with interest rate and a mix of available capital foreign exchange risk sources management strategies Key Highlights GROSS INCOME AVAILABLE REVENUE FOR DISTRIBUTION (FY 2018/19) (FY 2018/19) S$206.2m S$101.3m NET PROPERTY DISTRIBUTION INCOME PER UNIT (FY 2018/19) (FY 2018/19) S$159.4m 4.48¢ NET ASSET STABLE VALUE GEARING (As at 30 Jun 2019) (As at 30 Jun 2019) S$1,930.0m 36.1% RESILIENT OCCUPANCY (1) (As at 30 Jun 2019) 96.3% Note: (1) Based on commenced leases as at 30 June 2019. Our Signature Style Our financial prudence and backing from our strong sponsor form the foundation on which we deliver consistent performance. We continue to refine our quality portfolio and sharpen our financial prowess to derive sustainable long-term value for our Unitholders. STRONG HEALTHY LONG SPONSOR BALANCE WEIGHTED (As at 30 Jun 2019) SHEET AVERAGE LEASE YTL Corporation combined (As at 30 Jun 2019) EXPIRY (1) (2) market capitalisation Gearing Ratio (As at 30 Jun 2019) US$ % 5.8b 36.1 9.4 YEARS with its listed by NLA entities in Malaysia 5.4YEARS RESILIENT % by Gross Rent RETAIL 90 PORTFOLIO (As at 30 Jun 2019) OCCUPANCY (1) Fixed/Hedged (As at 30 Jun 2019) Debt Ratio 97.8% BALANCED Notes: (1) Based on commenced PORTFOLIO BBB leases as at 30 June 2019. MASTER/ RATING (2) Excludes tenants’ option ANCHOR LEASES with stable outlook to pre-terminate (As at 30 Jun 2019) or renew their by Standard & Poor’s existing leases. 45.8% in August 2019 by Gross Rent Our Tailored Approach We customise experiences to suit evolving consumer preferences through our strategic asset enhancements and curated brands. REFRESHED IMAGE Asset enhancement works to revamp Starhill Gallery into an integrated development with hotel and retail elements in line with global trend to EXPERIENTIAL RETAIL stay at the forefront of a changing retail landscape Differentiated tenant mix at our properties with a focus on desirable brands sought after by consumers and tourists seeking a customised experience to fulfil their desired lifestyle Our Attractive Footprint Improved connectivity with better rail networks will enhance vibrancy and create new opportunities for our assets. ENHANCED CONNECTIVITY The new Thomson-East Coast Line will complete in stages by 2024 with the new Orchard MRT Station, In addition to the existing located just a stone’s throw away Sungai Buloh-Kajang Line, from our Singapore Properties, the new Sungai Buloh- expected to be ready by 2021 Serdang-Putrajaya (SSP) Line is expected to complete in 2022 and will have two new MRT stations within the vicinity of our Malaysia Properties 10 OVERVIEW STARHILL GLOBAL REIT Our Geographical Reach Starhill Global REIT’s portfolio comprises 10 mid- to high-end properties (mainly retail assets) in six Asia-Pacific cities. SINGAPORE AUSTRALIA BY ASSET VALUE BY ASSET VALUE (As at 30 Jun 2019) (As at 30 Jun 2019) S$2,116.0m S$489.8m BY GROSS REVENUE BY GROSS REVENUE (FY 2018/19) (FY 2018/19) WISMA ATRIA PROPERTY MYER CENTRE ADELAIDE SINGAPORE ADELAIDE RETAIL RETAIL 83.8% 94.6% OFFICE OFFICE 16.2% 5.4% NGEE ANN CITY PROPERTY DAVID JONES BUILDING SINGAPORE & PLAZA ARCADE PERTH RETAIL 77.3% RETAIL 100% OFFICE 22.7% ANNUAL REPORT FY 2018/19 11 NUMBER OF ASIA-PACIFIC RETAIL AND INVESTMENT PROPERTIES CITIES OFFICE SPACE PROPERTIES 10 6 2.24m sq ft S$3,064.9m MALAYSIA JAPAN CHINA BY ASSET VALUE BY ASSET VALUE BY ASSET VALUE (As at 30 Jun 2019) (As at 30 Jun 2019) (As at 30 Jun 2019) S$370.8m S$59.9m S$28.4m BY GROSS REVENUE BY GROSS REVENUE BY GROSS REVENUE (FY 2018/19) (FY 2018/19) (FY 2018/19) STARHILL GALLERY (1) EBISU FORT (1) CHINA PROPERTY KUALA LUMPUR TOKYO CHENGDU RETAIL RETAIL RETAIL 100% 100% 100% LOT 10 PROPERTY (1) DAIKANYAMA (1) KUALA LUMPUR TOKYO RETAIL RETAIL 100% 100% Note: (1) Largely retail with a small office component. 12 OVERVIEW STARHILL GLOBAL REIT Our Business in Brief SINGAPORE AUSTRALIA Centrally-located assets in the prime The three Australia assets are located in the stretch of Orchard Road, with excellent prime retail districts and pedestrian streets connectivity to transportation hubs. of the city centres in Adelaide and Perth. Wisma Atria Property Myer Centre Adelaide, Adelaide The Wisma Atria Property comprises 257 strata lots An eight-storey retail centre with four basement representing 74.23% of the total share value of strata levels, and office component which includes a lots in Wisma Atria. These strata lots represent retail six-storey office tower and two heritage buildings. areas (excluding the space owned by Isetan and It is located along the premier and iconic Rundle Mall common area property) and the office tower. in Adelaide’s city centre. Ngee Ann City Property David Jones Building, Perth Ngee Ann City Property consists of four strata lots A four-storey heritage-listed retail centre anchored representing 27.23% of the total share value of strata by David Jones. lots in Ngee Ann City. These lots include retail and Plaza Arcade, Perth office spaces. A three-storey heritage-listed retail building located next to the David Jones Building. The property is anchored by global apparel retailer, UNIQLO. Both properties are located in the heart of Perth’s city centre, and enjoy dual frontage to the bustling Murray Street Mall and Hay Street Mall. More details on pages 34 to 39 More details on pages 40 to 45 REVENUE CONTRIBUTION REVENUE CONTRIBUTION (FY 2018/19) (FY 2018/19) S$127.1m S$46.2m Wisma Atria David Jones Property Building 48.6% 25.6% Ngee Ann City Myer Centre Property Plaza Arcade Adelaide 51.4% 6.6% 67.8% Singapore, Australia and Malaysia Properties contributed 97.7% of FY 2018/19 revenue.