Financial Statements And Related Announcement :: Third Quarter Results

STARHILL GLOBAL REAL ESTATE INVESTMENT TRUST

FINANCIAL STATEMENTS ANNOUNCEMENT

FOR THE THIRD QUARTER ENDED 31 MARCH 2019

TABLE OF CONTENT

DESCRIPTION	PAGE
SUMMARY OF STARHILL GLOBAL REIT'S RESULTS	3
DISTRIBUTION DETAILS	3
STATEMENT OF TOTAL RETURN AND DISTRIBUTION	4-7
BALANCE SHEET	8-9
AGGREGATE AMOUNT OF BORROWINGS	10
CONSOLIDATED CASH FLOW STATEMENT	11
STATEMENT OF MOVEMENTS IN UNITHOLDERS' FUNDS	12-13
DETAILS OF CHANGE IN THE UNITS	14
TOTAL NUMBER OF ISSUED UNITS	14
SALES, TRANSFERS, DISPOSAL, CANCELLATION AND/OR USE OF TREASURY UNITS	14
AUDIT	14
AUDITORS' REPORT	14
ACCOUNTING POLICIES	14
CHANGES IN ACCOUNTING POLICIES	15
CONSOLIDATED EARNINGS PER UNIT AND DISTRIBUTION PER UNIT	15-16
NET ASSET VALUE/NET TANGIBLE ASSET PER UNIT	16
REVIEW OF PERFORMANCE	16-18
VARIANCE BETWEEN FORECAST AND ACTUAL RESULTS	18
OUTLOOK	18-20
DISTRIBUTIONS	21-23
INTERESTED PERSON TRANSACTIONS	23
CONFIRMATION THAT THE ISSUER HAS PROCURED UNDERTAKINGS FROM ALL ITS	23
DIRECTORS AND EXECUTIVE OFFICERS UNDER RULE 720(1)
CERTIFICATION PURSUANT TO PARAGRAPH 7.3 OF THE PROPERTY FUNDS	23
APPENDIX
DIRECTORS' CONFIRMATION	23

Financial Statements Announcement

For The Third Quarter Ended 31 March 2019

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INTRODUCTION

Starhill Global Real Estate Investment Trust ("Starhill Global REIT" or "Trust"), is a real estate investment trust constituted by the Trust Deed entered into on 8 August 2005 (as amended, restated or supplemented from time to time) between YTL Starhill Global REIT Management Limited as the Manager of Starhill Global REIT and HSBC Institutional Trust Services (Singapore) Limited as the Trustee of Starhill Global REIT. Starhill Global REIT was listed on the main board of the Singapore Exchange Securities Trading Limited on 20 September 2005.

The principal activity of Starhill Global REIT and its subsidiaries (the "Group") is to invest primarily in prime real estate used mainly for retail and/or office purposes, with the objective of delivering regular and stable distributions to Unitholders ("Unitholders") and to achieve long-term growth in the net asset value per unit.

These financial statements for the quarter from 1 January 2019 to 31 March 2019 have not been audited or reviewed by our auditors. The current figures presented in these financial statements are in relation to the period from 1 January 2019 to 31 March 2019 ("3Q FY18/19") as well as the nine months period from 1 July 2018 to 31 March 2019 ("YTD FY18/19"). The comparative figures are in relation to the period from 1 January 2018 to 31 March 2018 ("3Q FY17/18") as well as the nine months period from 1 July 2017 to 31 March 2018 ("YTD FY17/18").

As at 31 March 2019, the property portfolio of Starhill Global REIT consists of:

•257 strata lots representing 74.23% of the total share value of the strata lots in Wisma Atria ("Wisma Atria Property") and 4 strata lots representing 27.23% of the total share value of the strata lots in Ngee Ann City ("Ngee Ann City Property") (collectively the "Singapore Properties");

•100% interest in Myer Centre Adelaide, David Jones Building and Plaza Arcade in Adelaide and Perth, Australia (collectively the "Australia Properties");

•100% interest in Starhill Gallery and 137 strata parcels and two accessory parcels within Lot 10 shopping centre ("Lot 10 Property") in Kuala Lumpur, Malaysia (collectively the "Malaysia Properties"); and

•100% interest in Chengdu Xin Hong Property in Chengdu, China (the "China Property") and 100% interest in two properties in Tokyo, Japan (the "Japan Properties") (collectively the "China and Japan Properties").

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Starhill Global REIT

Financial Statements Announcement

For The Third Quarter Ended 31 March 2019

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SUMMARY OF STARHILL GLOBAL REIT'S RESULTS FOR THE THIRD QUARTER ENDED 31 MARCH 2019

	Group	Group
	01/01/19 to	01/01/18 to	Increase /
	31/03/19	31/03/18	(Decrease)
	S$'000	S$'000	%
Gross revenue	51,267	51,742	(0.9%)
Net property income	39,555	40,284	(1.8%)
Income available for distribution	25,038	25,385	(1.4%)
Income to be distributed to Unitholders	23,993	23,775	0.9%
	Group	Group
	01/01/19 to	01/01/18 to	Increase /
	31/03/19	31/03/18	(Decrease)
	Cents per unit		%
Distribution per unit ("DPU")
For the quarter from 1 January to 31 March (1)	1.10	1.09	0.9%
Annualised (based on the three months ended 31 March)	4.46	4.42	0.9%
Footnote:

(1)The computation of DPU for the quarter ended 31 March 2019 is based on total number of units entitled to the distributable income for the period from 1 January 2019 to 31 March 2019 of 2,181,204,435.

DISTRIBUTION DETAILS

Distribution period	1	January 2019 to 31 March 2019
Distribution amount to Unitholders	1.10 cents per unit
Books closure date	6	May 2019
Payment date	30 May 2019

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Starhill Global REIT

Financial Statements Announcement

For The Third Quarter Ended 31 March 2019

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1(a) Income statement together with a comparative statement for the corresponding period of the immediately preceding financial year

Statement of Total Return and Distribution (3Q FY18/19 vs 3Q FY17/18)

		Group	Group		Trust	Trust
		01/01/19 to	01/01/18 to	Increase /	01/01/19 to	01/01/18 to	Increase /
		31/03/19	31/03/18	(Decrease)	31/03/19	31/03/18	(Decrease)
	Notes	S$'000	S$'000	%	S$'000	S$'000	%
Gross revenue	(a)	51,267	51,742	(0.9%)	31,794	32,405	(1.9%)
Maintenance and sinking fund contributions	(b)	(1,684)	(1,755)	(4.0%)	(1,667)	(1,732)	(3.8%)
Property management fees	(c)	(1,378)	(1,406)	(2.0%)	(952)	(968)	(1.7%)
Property tax		(4,991)	(5,062)	(1.4%)	(3,060)	(3,131)	(2.3%)
Other property expenses	(d)	(3,659)	(3,235)	13.1%	(1,162)	(835)	39.2%
Property expenses		(11,712)	(11,458)	2.2%	(6,841)	(6,666)	2.6%
Net property income		39,555	40,284	(1.8%)	24,953	25,739	(3.1%)
Finance income	(e)	230	205	12.2%	20	38	(47.4%)
Interest income from subsidiaries		-	-	-	1,388	1,483	(6.4%)
Dividend income from subsidiaries		-	-	-	1,330	2,504	(46.9%)
Management fees	(f)	(3,904)	(3,980)	(1.9%)	(3,677)	(3,742)	(1.7%)
Trust expenses	(g)	(1,124)	(1,132)	(0.7%)	(756)	(717)	5.4%
Finance expenses	(h)	(9,618)	(9,141)	5.2%	(6,339)	(5,673)	11.7%
Non property expenses		(14,416)	(14,048)	2.6%	(8,034)	(6,107)	31.6%
Net income before tax		25,139	26,236	(4.2%)	16,919	19,632	(13.8%)
Change in fair value of derivative instruments	(i)	(1,639)	1,646	NM	819	1,849	(55.7%)
Foreign exchange (loss)/gain	(j)	(31)	312	NM	(876)	(2,393)	(63.4%)
Total return for the period before tax		23,469	28,194	(16.8%)	16,862	19,088	(11.7%)
and distribution
Income tax	(k)	(934)	(1,512)	(38.2%)	(205)	(266)	(22.9%)
Total return for the period after tax, before
		22,535	26,682	(15.5%)	16,657	18,822	(11.5%)
distribution
Non-tax deductible/(chargeable) items and other	(l)	2,503	(1,297)	NM	8,381	6,563	27.7%
adjustments
Income available for distribution		25,038	25,385	(1.4%)	25,038	25,385	(1.4%)

Footnotes:

(a)Gross revenue comprises mainly gross rent and other revenue earned from investment properties, including turnover rent. The decrease in gross revenue for the Group was mainly due to lower contributions from Wisma Atria Property and the depreciation of A$ against S$, partially offset by higher contributions from Myer Centre Adelaide, Plaza Arcade and Ngee Ann City Property (Office). Approximately 38% (3Q FY17/18: 37%) of total gross revenue for the three months ended 31 March 2019 were contributed by the overseas properties.

(b)The decrease in maintenance and sinking fund contributions for the current quarter was mainly attributed to Wisma Atria Property.

(c)Property management fees comprise mainly 3.0% per annum of the gross revenue from Singapore Properties and fees paid to external property managers for Australia Properties and Japan Properties.

(d)Other property expenses were higher for the current quarter mainly due to higher operating expenses including allowance for rental arrears mainly for Wisma Atria Property and Plaza Arcade.

(e)Represents interest income from bank deposits and current accounts for the three months ended 31 March 2019.

(f)Management fees comprise mainly the base fee, which is calculated based on 0.5% per annum of the value of the trust property.

(g)The decrease in trust expenses for the Group was mainly due to lower expenses incurred by Malaysia Properties, partially offset by higher expenses incurred by the Trust.

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Starhill Global REIT

Financial Statements Announcement

For The Third Quarter Ended 31 March 2019

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(h)Finance expenses were higher for the current quarter mainly due to higher interest costs incurred on the existing S$ borrowings for the three months ended 31 March 2019.

(i)Represents mainly the change in the fair value of interest rate swaps, as well as foreign exchange forward contracts for the three months ended 31 March 2019.

(j)Represents mainly the foreign exchange differences on translation of foreign currency denominated transactions and monetary items, as well as realised foreign exchange differences from the settlement of forward contracts for the Group for the three months ended 31 March 2019.

(k)Income tax includes withholding tax, corporate tax and deferred tax provided for the overseas properties. The decrease was mainly attributed to the higher Malaysia withholding taxes paid in the corresponding quarter.

(l)See details in the distribution statement below.

Distribution Statement (3Q FY18/19 vs 3Q FY17/18)

		Group	Group		Trust	Trust
		01/01/19 to	01/01/18 to	Increase /	01/01/19 to	01/01/18 to	Increase /
		31/03/19	31/03/18	(Decrease)	31/03/19	31/03/18	(Decrease)
	Notes	S$'000	S$'000	%	S$'000	S$'000	%
Total return after tax, before distribution		22,535	26,682	(15.5%)	16,657	18,822	(11.5%)
Non-tax deductible/(chargeable) items and other		2,503	(1,297)	NM	8,381	6,563	27.7%
adjustments:
Finance costs	(m)	144	132	9.1%	209	198	5.6%
Sinking fund contribution		387	452	(14.4%)	387	452	(14.4%)
Change in fair value of derivative instruments		1,523	(1,646)	NM	(935)	(1,849)	(49.4%)
Deferred income tax		40	41	(2.4%)	-	-	-
Foreign exchange loss/(gain)		88	(407)	NM	943	2,395	(60.6%)
Other items	(n)	321	131	145.0%	828	593	39.6%
Net overseas income not distributed to the Trust,		-	-	-	6,949	4,774	45.6%
net of amount received
Income available for distribution		25,038	25,385	(1.4%)	25,038	25,385	(1.4%)
Income to be distributed to Unitholders	(o)	23,993	23,775	0.9%	23,993	23,775	0.9%

Footnotes:

(m)Finance costs include mainly amortisation of upfront borrowing costs.

(n)Other items include mainly trustee's fee, straight-line rental adjustments, fair value adjustment on security deposits, commitment fees and other non-tax deductible/chargeable costs.

(o)Approximately S$1.0 million of income available for distribution for the three months ended 31 March 2019 has been retained for working capital requirements.

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Starhill Global REIT