Starhill Global Reit says DPU could take major hit from David Jones voluntary administration
Retailer contributed 4.7% of the portfolio revenue; Reit may mitigate DPU impact with gains from recent divestments
[SINGAPORE] Starhill Global Real Estate Investment Trust (Reit) said on Thursday (Nov 5) that Australian retailer David Jones, the anchor tenant of its David Jones Building in Perth, has verbally informed the property’s landlord that it has entered voluntary administration.
The Reit’s manager said it has requested written confirmation from the tenant, adding that the landlord has not received any notice of lease termination and is seeking advice on its rights under the agreement.
David Jones occupies about 246,526 square feet, or 95.1 per cent of the property’s gross lettable area, as at Jun 30, 2026.
Its lease generates annual revenue of about S$9 million, accounting for 4.7 per cent of the Reit’s total portfolio revenue and 6 per cent of its net property income for the financial year ended Jun 30, 2026.
On a pro forma basis, assuming the lease had been terminated on Jul 1, 2025, with no replacement tenant for 12 months, Starhill Global Reit’s distribution per unit (DPU) for FY2025/26 would have been about S$0.0329, compared with the actual S$0.0368.
This represents a potential reduction of about 10.6 per cent.
Under the same scenario, the Reit’s portfolio committed occupancy would fall to about 86.1 per cent, from 97.4 per cent as at Sep 30, 2026.
The manager said it may consider distributing part of the gains from recent divestments to partially mitigate the impact on DPU.
The David Jones Building was valued at S$106.4 million as at Jun 30, accounting for about 3.9 per cent of Starhill Global Reit’s total portfolio valuation.
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The latest announcement follows an update on Wednesday evening, when the Reit disclosed that David Jones had requested changes to its existing lease arrangements, including a reduction in the space it occupies.
The proposed changes were still subject to negotiations and agreement on commercial terms.
Starhill Global Reit also disclosed that the tenant was about S$1.3 million in rental arrears as at October, of which about S$500,000 was covered by the landlord’s existing provisions.
David Jones had made regular rental payments up to September 2026.
The development comes amid financial difficulties at David Jones, raising uncertainty over the future for the department stores and existing lease arrangements.
For Starhill Global Reit, the immediate concern is the 188-year-old retailer’s substantial footprint at its Perth property, where it occupies more than 95 per cent of the gross lettable area.
Meanwhile, Starhill Global Reit said it has been undertaking contingency planning for its Perth property, including pursuing replacement tenants and exploring options to reposition or repurpose the building for multiple tenants.
The manager said these efforts have gained positive traction, while redevelopment feasibility studies are also under way to assess market demand, capital requirements and expected returns.
It added that it would take the necessary steps to protect the interests of the Reit and its unitholders, and provide further updates when there are material developments.
Units of Starhill Global Reit closed S$0.005 or 1 per cent higher at S$0.51 on Wednesday.
