Three years ago, I wrote about Soilbuild Business Space REIT being given a Baa3 credit rating by Moody’s. (Read more: What is meant by Baa3?) Today, I receive an email notification that Starhill Global REIT has been downgraded from a credit rating of ‘BBB+’ to ‘BBB’ by Standard & Poors (S&P). This is an indication that something isn’t right even though it is not a recommendation to buy or sell.
My wife currently held 9% of Starhill Global REIT in her stock portfolio. In FY2019, Distribution Per Unit (DPU) declined 1.5% from 4.55 cents in FY18 to 4.48 cents in FY19.
Here are a few noteworthy points from the S&P report:
Starhill Global REIT is facing pressure in rent reversions in its key Singapore assets amid weakened economic conditions. Funds from operations (FFO) to debt to decline to 7.6%-7.8% in fiscals 2020 and 2021. Ngee Ann City’s master tenant’s rent...
