Coronavirus: Rental rebates for retail tenants at Wisma Atria, Ngee Ann City
A woman walks by Ngee Ann City on Feb 2, 2020.ST PHOTO: MARCELLIN LOPEZ
ST 28 Feb 2020
SINGAPORE (THE BUSINESS TIMES) - Rental rebates and marketing assistance are among support measures rolled out to Starhill Global Real Estate Investment Trust's (SGReit) retail tenants at its two Singapore properties.
SGReit's manager on Friday (FEB 28) announced it is extending such measures to help tenants weather the coronavirus situation.
Its Singapore properties comprise Wisma Atria and Ngee Ann City on Orchard Road. The retail and office portfolio also includes one property in China, two in Malaysia, two in Japan, and three in Australia.
A one-time rental rebate - which will be "more than the property tax rebate" announced in Budget 2020 - will be disbursed to qualifying tenants in Singapore, the manager said, without disclosing the amount of the rental rebate. Deputy Prime Minister Heng Swee Keat had urged landlords of private commercial properties to pass this 15 per cent property tax rebate on to their tenants by reducing rents.
In addition, the manager will offer rental rebates to the tenant at the China retail property in Chengdu which is on a fixed rent lease arrangement. The China property contributed less than 1 per cent of the group's net property income for the financial year ended June 30, 2019.
To help tenants reduce operating costs, SGReit is also giving them the flexibility to operate shorter hours.
Wisma Atria will provide parking redemption and other promotional offers as well, to attract shoppers to the mall.
"We recognise the difficulties that our tenants are facing during this trying time. Hence we are rolling out financial relief to qualifying tenants who have been affected by the Covid-19 outbreak," said Ho Sing, chief executive officer of the manager.
About 49.1 per cent of gross rent in SGReit's portfolio came from master and anchor retail leases, as at Dec 31, 2019. Most of the retail leases are based on fixed base rent with minimal turnover rent.
The weighted average lease expiry of the portfolio as at Dec 31, 2019, is 5.9 years by gross rent, while retail leases expiring in the fiscal year ending June 30, 2020 comprise just 5.2 per cent of gross retail rent.
The office portfolio contributed 13.4 per cent of SGReit's gross revenue for the quarter ended Dec 31, 2019.
The manager said it is still too early to ascertain the virus outbreak's full financial impact on SGReit.
However, it does not expect the current support measures extended to tenants to have a material impact on the distribution per unit of SGReit for the fiscal year ending June 30, 2020.
Units of SGReit were flat at $0.68 as at 10.04am on Friday, after the announcement.