YTL's SGREIT secures 10.0% rent increase for the master lease with Toshin in Ngee Ann City

SINGAPORE, 14 February 2013

YTL Starhill Global REIT Management Limited, as the manager of Starhill Global REIT (“SGREIT”) is pleased to announce that the June 2011 rent review process with Toshin Development Singapore Pte Ltd (“Toshin”) is completed today.

The new base rent, which is 10.0% higher than the prevailing rate, is effective for a period of two years commencing 8 June 2011. The new rate was based on the average of three market rental valuations, undertaken by independent licensed valuers, in accordance with the Court of Appeal’s directions.

The new rental rate is adjusted retrospectively from 8 June 2011. Subject to receipt of such accumulated arrears of rent from Toshin, the Manager intends to distribute substantially the rental arrears received net of expenses (including leasing commission (“Leasing Commission”) payable to YTL Starhill Global Property Management Pte Ltd for the renewal of the Toshin master lease for a further 12-year term) together with the distributable income for 1Q 2013.   

For illustrative purposes only and assuming the accumulated rental arrears owing as a result of the increase in rent for the period from 8 June 2011 to 31 December 2012 were paid in 2012 and after netting off expenses (including Leasing Commision), the proforma financial effect on SGREIT DPU for FY 2012 would be approximately 4.3% increase in DPU or an additional 0.19 Singapore cents per unit. The Toshin master lease accounted for 18.8% of SGREIT’s gross revenue in December 2012 and covers all the retail areas of the Ngee Ann City Property except level 5. Toshin is also the largest tenant of SGREIT.

There will be a separate exercise to determine the renewal rent to be paid upon the commencement of the further option period of 12 years under the Toshin master lease starting 8 June 2013. Toshin has on 19 April 2012 exercised their intention to exercise the option to renew the master lease.

Mr Ho Sing, Chief Executive Officer of SGREIT, said, “We are pleased with the result of the rent review for the period up to 8 June 2013, which reflects the premium location and prestigious asset quality of Ngee Ann City. Our master lease with Toshin provides the REIT with long-term income stability as well as the potential for rental upside every three years. Toshin is a valued tenant and we will continue to work closely with them to ensure Ngee Ann City continues to be the premier shopping destination along Orchard Road”.