SINGAPORE: YTL Starhills reported lower revenues and profits in 1Q17 as higher contributions from Singapore and Malaysia’s master leases were inadequate to compensate for the decline in other markets.
Revenue of S$55.3m slid by 2.7% y-o-y and net property income (NPI) of S$42.9m was down by 1.7%. The higher contributions from Singapore (NPI : +4.4%) and Malaysia (NPI : +7.7%), mainly due to rental uplift in master tenants, were inadequate to offset the lower contributions from Australia, China and Japan, notes DBS Group Research.
According to the research house, the increase in Singapore properties’ performance was also due to a one-off recognition of S$1.9m pre-termination rental compensation for a lease at Wisma Atria, which has since been taken up.
Australian properties contributed 10.0% lower y-o-y in NPI terms, mainly due to unfilled vacancies at Myer Centre Adelaide office and Plaza Arcade’s lease terminations, leading up to the planned enhancement works.
NPI from China and Japan properties was 68.7% lower y-o-y, in line with the weaker performance of Renhe Spring Zongbei Property and depreciation of RMB, as well as loss of contribution from Roppongi Terzo which was divested in Jan 2016.
“We would like to highlight that these two markets only contribute to 2.7% of total revenue and
1.4% of total NPI, therefore, any adverse impact should be minimal to the bottom line,” said DBS Group Research.
