Starhill Global REIT Succeeds in Arbitration Over Myer Centre Adelaide Lease

Key Developments

• Arbitral Award in Favour of Starhill Global REIT: The tribunal has issued a partial final award dated 22 January 2026, dismissing Myer Pty Ltd’s claim regarding an alleged breach of lease at the Myer Centre Adelaide.
• Potential Cost Recovery: The tribunal will decide on costs in a separate award. Starhill Global REIT has already incurred approximately A\$5 million in legal and related professional fees. If the costs award is favourable, the REIT expects to recover part of these expenses.
• Significance of the Myer Lease: Myer occupies around 324,000 square feet in Myer Centre Adelaide. For the financial year ended 30 June 2025, this lease contributed approximately 7.0% of Starhill Global REIT’s total portfolio revenue and 8.9% of its net property income.
• Impact on Distributable Income: The Award is not expected to have a material impact on Starhill Global REIT’s distributable income for the financial year ending 30 June 2026.
• Ongoing Updates: The Manager will continue to make announcements should there be any further material developments regarding this arbitration.

Important Information for Shareholders

• Resolution of a Major Lease Dispute: The dismissal of Myer’s claim removes a significant risk to Starhill Global REIT’s income stream and portfolio stability. Given the substantial contribution of the Myer lease to overall revenue and net property income, a negative arbitration outcome could have materially impacted the REIT’s financial performance and potentially its unit price.
• Legal Costs and Recovery: The substantial legal fees incurred (A\$5 million) highlight the financial exposure from the dispute. A favourable cost award could partially offset these expenses, potentially improving distributable income and net returns to unitholders.
• No Material Impact Expected: Investors should note that, per management, the Award is not expected to materially affect distributable income for FY ending 30 June 2026. This provides assurance on income stability for the near term.
• Portfolio Overview and Management: Starhill Global REIT’s diversified portfolio includes nine properties across Singapore, Australia, Malaysia, Japan, and China, valued at about S\$2.8 billion as of 30 June 2025. The REIT is managed by YTL Starhill Global REIT Management Limited, indirectly held by YTL Corporation Berhad.
• Risk Factors: The announcement contains cautionary statements about investment risks, including market volatility, economic conditions, potential outbreaks, interest rate and forex trends, competition, and changes in occupancy rates or rental income. Investors are reminded not to place undue reliance on forward-looking statements.

Implications for Investors and Share Price

• Positive Outcome: The favourable arbitral award provides stability to a major income-generating asset and removes a potential source of uncertainty. This outcome may be viewed positively by the market and could support the REIT’s unit price.
• Potential Upside from Cost Recovery: Investors should watch for the tribunal’s separate decision on cost recovery, which could further benefit the REIT’s financials.
• Ongoing Monitoring: Management’s commitment to further updates ensures transparency, allowing investors to stay informed of any new developments that could impact the REIT’s performance or share price.

Disclaimer

This article is for informational purposes only and does not constitute investment advice or an offer to buy or sell units in Starhill Global REIT. Past performance is not indicative of future results. The value of units and income derived may rise or fall. Investors should consider all risks and their own investment objectives before making any decisions. Actual future performance may differ materially from forward-looking statements due to various factors, including market conditions, economic trends, and other risks.

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