Replace - Annual General Meeting :: Voluntary

SGX-ST Announcement

ANNUAL GENERAL MEETING TO BE HELD ON 28 OCTOBER 2021

RESPONSES TO SUBSTANTIAL AND RELEVANT QUESTIONS

YTL Starhill Global REIT Management Limited, as manager (the "Manager") of Starhill Global Real Estate Investment Trust ("Starhill Global REIT"), wishes to thank all unitholders of Starhill Global REIT ("Unitholders") who submitted their questions in advance of the Annual General Meeting to be held by way of electronic means on 28 October 2021 at 11.00 a.m. (Singapore time).

Please refer to Annex A hereto for the list of substantial and relevant questions, and the Manager's responses to these questions.

By Order of the Board

YTL Starhill Global REIT Management Limited (Company registration no. 200502123C)

(as Manager of Starhill Global Real Estate Investment Trust)

Lam Chee Kin

Joint Company Secretary

26 October 2021

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ANNEX A: RESPONSES TO SUBSTANTIAL AND RELEVANT QUESTIONS

Financial Performance

	No.		Questions		Responses
	1.		Can the management		The management fees were partially paid in units to
			fees payable to the		stabilise the Distribution Per Unit ("DPU") and mitigate the
			manager not be in the		disruption and cost resulting from the asset enhancement
			form of units and/or at		works of The Starhill as well as to demonstrate alignment
			such a low issue price,		of interest and support to minority unitholders, as set out in
			which can dilute the share		our circular to unitholders in relation to the Malaysia
			of unitholders and the		Master Tenancy Agreements and asset enhancement
			share price over time?		works for The Starhill (formerly known as "Starhill
					Gallery"). As such, approximately 56% of the management
					fees to the Manager were paid or are payable in units
					during the period of asset enhancement works of The
					Starhill. After completion of the asset enhancement works,
					the management fees payable in units will be
					progressively reduced. From June 2019 to July 2021,
					management fees paid in units amounted to approximately
					1.3% of the unitholders' base.
					The issue price for the quarterly management fees
					paid/payable in units is determined based on the 10-day
					volume-weighted average price of Starhill Global REIT
					prior to the issuance, in accordance with the trust deed.
					Please refer to the Circular To Unitholders In Relation To
					The New Master Tenancy Agreements For Starhill Gallery
					And Lot 10 Property And The Asset Enhancement Works
					For Starhill Gallerydated 25 April 2019 on our website for
					more information.
	2.		Will the Executive		Prior to COVID-19, Starhill Global REIT has historically
			Chairman consider to pay		paid out more than 95% of its distributable income, which
			better dividends in coming		is above the statutory dividend payout of 90% of taxable
			years, once earnings		income.
			increases, and will he
			consider to reward		However, in view of the recent COVID-19 pandemic, the
			shareholders with bonus		Manager retained more distributable income over the last
			issue?		two financial years as a measure of prudence given the
					fluidity of the pandemic and to strengthen its balance
					sheet. As at 30 June 2021, Starhill Global REIT's gearing
					level is 36.1% and its cash balance stood at S$108.3
					million with sufficient undrawn committed revolving credit
					facilities to meet working capital requirements. Fitch
					Ratings has also affirmed Starhill Global REIT's "BBB"

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Please consider giving better dividends as the company progresses

credit rating with a stable outlook in March 2021. With a sound balance sheet and enhanced financial flexibility, we have not only navigated through the challenging times but are in a position to explore new opportunities.

Once the situation stabilises, we intend to revert to our regular dividend payout rate. As a real estate investment trust, we pay out cash distributions to reward unitholders. Cash distribution gives more flexibility to unitholders, and those who wish to increase their unitholdings can choose to convert their cash distribution into new units under our Distribution Reinvestment Plan.

3. Page 16 of the FY20/21 Annual Report shows Revenue, NPI, DPU has been falling since FY16/17. What is reason and how does management going to address?

In general, the decline in revenue, net property income ("NPI") and DPU since FY16/17 were largely attributed to lower NPI contributions from the Wisma Atria Property and Myer Centre Adelaide, disruption of rental income from asset redevelopment works at Plaza Arcade in Perth and The Starhill in Kuala Lumpur, depreciation of Australian dollar against the Singapore dollar, higher withholding taxes incurred in Malaysia, as well as rental assistance provided for eligible tenants who are affected by COVID- 19, including allowance for rental rebates and arrears. For the last two financial years, we also retained a higher portion of distributable income as a measure of prudence given the COVID-19 pandemic.

Going forward, shopper traffic and sales will continue to be impacted by safe distancing measures, work from home arrangements and border restrictions, in particular for malls that rely on tourism. The gradual re-opening of borders in Singapore, Malaysia and Australia coupled with higher vaccination rates bode well. However, consumers' and retailers' confidence will take a while to recover and they are likely to tread with caution in the near term. In the meantime, we will work with our tenants for a mutually sustainable outcome.

The retail landscape is also rapidly evolving, making it imperative for us to enhance our assets and fine-tune the positioning of our malls so as to maintain our appeal to our shoppers. In this light, we have embarked on several asset enhancement initiatives, including the transformation of The Starhill into an integrated development comprising four retail floors and three upper floors for hospitality use as an extension of JW Marriot Hotel and more recently the interior upgrading works at Wisma Atria to revamp the common areas, lift lobbies, washrooms and atrium space.

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In addition to modernising its hardware, Starhill Global REIT has also been actively fine-tuning its tenant mix to uplift the lifestyle component of the malls with new tenants such as The Providore, Haidilao Hot Pot, and Garmin at the Wisma Atria Property, Jonetz by Don Donki at the Lot 10 Property as well as the Taiwanese lifestyle bookstore Eslite Spectrum at The Starhill.

4. With regard to Page 153 This comprises largely capital expenditure incurred mainly

of the FY20/21 Annual	for The Starhill's asset enhancement works, the Wisma
Report, can you explain	Atria Property and Myer Centre Adelaide in FY20/21.
the item "Additional,	Other adjustments including straight-line rental
straight-line rental and	adjustments were largely attributable to the amortisation of
other adjustment"?	leases and other related incentives during the current
	period.

1. Could you give an update on the latest COVID-19 situation which may likely affect the portfolio performance going forward considering that many countries stand ready to reopen for business?
2. Can you give a forecast as to when the earning/dividends yield will return back to pre- COVID-19 levels?

The rate of recovery of the global economy and the retail sector will depend on the success of the international vaccine roll-out, which will in turn enable safe distancing measures to be lifted and border restrictions eased.

Additionally, consumer confidence will also take time to heal after almost two years of the pandemic which has disrupted global economies. Leasing demand has been and is likely to remain soft as retailers continue to adopt a cautious approach, preferring more clarity before committing to new leases or embarking on expansion plans.

While we do see green shoots emerging as Singapore, Malaysia and Australia progressively open their borders, the path towards normalisation is expected to be gradual with no definitive timeline. Therefore, we will remain cautious and continue to exercise prudence.

• Please explain why so many of the properties are currently valued below our purchase price?

On a portfolio level, the latest valuation of our current portfolio as at 30 June 2021 in Singapore dollars represents a 22.4% increase, as compared to the purchase price of the properties. The valuation of the Singapore properties (which account for more than 67% of the total asset value) as at 30 June 2021 was higher than the purchase price. For the Australia and Malaysia portfolio properties, the decrease in valuation is mainly due to the depreciation of the Australian dollar and Malaysian ringgit against the Singapore dollar, and the weaker market conditions and retail outlook due to the onset of the COVID-19 pandemic.

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The remaining China and Japan properties represent about 3% of the total asset value as at 30 June 2021.

Strategy and Acquisitions

No.	Questions	Responses
1.	What other initiatives,	We continue to search for yield accretive acquisitions and
	other than the usual asset	as a form of risk diversification, we would like to further
	enhancement measures, is	expand our office footprint. For FY20/21, office assets
	the manager pursuing to	accounted for just 14.7% of our gross revenue. Although
	bring back shareholding	office assets provide a slightly lower yield when compared
	value of the stock to the	to retail assets, they tend to be relatively more stable, as
	investors?	demonstrated during the pandemic.

1. What is the growth plan for Starhill Global REIT? It seems that the management has no plan at all to grow the REIT, but remain as status quo in all these years. This paints a picture of a REIT in the sunset phase. How long can this last?
2. After the pandemic, what direction is Starhill Global REIT moving in?

Since the acquisition of Myer Centre Adelaide, we have been careful in our acquisition strategy given the high valuation, low yield of global commercial properties and the intensifying competition from e-commerce. We have also been focusing more on the office sector where competition is intense. When evaluating potential acquisitions, we are mindful that the assets must be attractively priced and yield accretive with growth opportunities while preserving balance sheet strength, particularly during these uncertain times. Additionally, travel restrictions as a result of COVID-19 have also hampered our ability to conduct due diligence for prospective overseas acquisition targets.

We have concurrently focused our effort on rejuvenating our existing portfolio for organic growth. For instance, we have successfully activated part of the vacant space at Myer Centre Adelaide, revamped Plaza Arcade, introduced the first Uniqlo store in Perth and repositioned The Starhill into an integrated lifestyle development. More recently, we have also embarked on the interior upgrading of Wisma Atria to modernise the mall and maintain its appeal as a premier lifestyle mall.

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