Starhill Global REIT - Modest revenue and net property income growth

Revenue and net property income registered modest growth 

Announcing the business updates for 3Q FY25/26, Starhill Global REIT posted S$47.9 million in gross revenue, up 0.7% year-on-year.  The positive revenue movement was driven by stronger contributions from Ngee Ann City and Lot 10 in Malaysia.  In addition, the higher revenue was driven by the appreciation of the Australian dollar and Malaysian ringgit against the Singapore dollar. These were partly offset by lower contribution from Myer Centre Adelaide Office and Wisma Atria Retail. 

To recap, in January 2026, Starhill Global REIT has won its arbitration against Myer. This means Myer must remain as tenant and rental income from the asset is preserved, removing a major downside risk to the earnings going forward 

Net property income was S$37.9 million in 3Q FY25/26, unchanged from 3Q FY24/25 despite modestly higher revenue, due to higher operating expenses at the China property associated with the new tenant fit-out. On a like-for-like basis, net property income would have increased by 1.2% year-on-year.

Net property income (NPI) margin remain healthy at 79.1% in 3Q FY25/26 (79.6% in 3Q FY24/25), supported by the master/anchor lease structure which partially mitigates rising operating costs. Master and anchor leases representing 54.3% of gross rental income (GRI).

Singapore remains the dominant earnings contributor at ~61.5% of revenue. Ngee Ann City delivered its strongest quarter, while Wisma Atria Retail saw slightly softer performance amid 0.8% lower year-to-date shopper traffic. Tenant sales was flat in 3Q FY25/26 versus 3Q FY24/25.   

Malaysia delivered a standout performance with net property income (NPI) rising from S$7.0 million to S$7.7 million in 1Q FY25/26, +10.0% year-on-year.  This was  supported by periodic rental step-ups under master tenancy agreements at The Starhill and Lot 10. Both properties maintained 100% occupancy.  

Australia NPI was flat at S$6.5 million. Occupancy improved to 91.6% from 86.9% a year ago, reflecting active leasing at Myer Centre Adelaide. Perth and Adelaide super-prime CBD retail rents rose 10.0% and 5.5% respectively in 1Q 2026 — positive read-through for the David Jones upward-only rent review due in August 2026.

Proactive capital management lowered refinancing risks till FY28/29   

Starhill Global REIT has confirmed a S$70 million unsecured sustainability-linked committed revolving credit facility.  The revolving credit facility will be drawn in October 2026.  The full amount is expected to refinance the outstanding S$70 million unsecured medium term notes maturing in October 2026.   

Separately, a unsecured sustainability-linked term loan facility of A$70 million was confirmed.  This facility will be utilised to settle the A$ term loan maturing in FY27/28. 

Excluding the above, Starhill Global REIT has S$350 million in available long-term committed and undrawn revolving credit facility (RCF).  This is sufficient to cover the remaining maturing debts up to FY28/29.

As of 31 March 2026, 80% of the total debt is fixed or hedged.  With easing interest rates in 2026, Starhill Global REIT could benefit from lower interest expenses as hedges roll off over FY2026 and FY2027.   The three-month compounded SORA (Singapore Overnight Rate Average), Singapore’s key benchmark interest rate, has decline to 1.0182%, -17 basis points year-to-date.

As of 31 March 2026, the weighted average debt maturity has shortened to 3.5 years.   Starhill Global REIT has addressed the debt maturing till FY28/29, reducing the refinancing risks.     

Interest coverage ratio of 3.0 times is higher than the average peers’ ratio of 2.7x and sits comfortably above the regulatory minimum of 1.5 times.

Reflecting the healthy balance sheet, Fitch Ratings affirmed Starhill Global REIT’s credit rating at “BBB” with a stable outlook.

Portfolio occupancy improved 

Portfolio occupancy improved to 96.4% as at 31 March 2026, from 94.6% as at 30 June 2025.  China continued to hold occupancy at 100% after the new lease commenced with the replacement tenant in March 2026.    

At Adelaide office property, around one-third of the office space vacated by the Tecchnicolor remains unfilled. 

Weight average lease expiry (WALE) remains high at 7.2 years, providing higher income visibility than industry average.  The long-dated lease structure remains unique to Starhill Global REIT and could be attributed to the new Toshin master lease which runs to June 2043. 

Singapore property reported stable tenant sales 

Year-to-date, tenant sales at the Wisma Atria Property was flat and shopper traffic slowed by 0.8% year-on-year in 1Q 2026.   

Asset enhancement initiative to support asset competitiveness

Currently, the two key asset enhancement initiatives in the pipeline are : (1) The S$2.2 million Wisma Atria façade upgrade to be completed by mid-2026; and (2) a A$6 million Myer Centre Adelaide food court refurbishment to be completed by end-2026.  The targeted investments in these assets would maintain the asset competitiveness and support occupancy retention.

Maintain BUY and target price at S$0.65.

Starhill Global REIT is trading at S$0.55, implying FY2026E distribution yield of 7.0%  In comparison, Lendlease Global Commercial REIT and Suntec REIT are trading at FY2026f distribution yield of 6.5% and 4.9%, respectively.   Starhill Global REIT is offering investors a higher and stable distribution yield.

It is trading at FY2025 price-to-book 0.71x, below the sector average PB of 0.86x.  Given the wider discount to net asset value (NAV), Starhill Global REIT is relatively attractive when compared to its peers

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Related links:

• Starhill Global REIT share price and share price target
• Starhill Global REIT dividend history and forecast

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