Here's where Starhill Global REIT based its 10% base rent boost

And find out more about Toshin master lease.

According to OCBC, Starhill Global REIT (SGREIT) announced that the rent review process relating to Toshin master lease at Ngee Ann City has been completed on last Thursday and that it has been awarded a 10.0% increase in base rent.

The new rate was based on the average of three market rental valuations undertaken by independent licensed valuers, in accordance with the Court of Appeal’s directions, and will be retrospectively applied for the term commencing 8 Jun 2011.

Here's more from OCBC:

Toshin is the master tenant occupying all the retail areas except level 5 of Ngee Ann City. For Dec 2012, Toshin lease contributed to 85.3% of the property’s gross rent and 18.8% of SGREIT’s portfolio gross rent.

Assuming the accumulated rental arrears owing as a result of the rental increase from 8 Jun 2011 to 31 Dec 2012 were paid in FY12 (after deducting expenses), management estimates the net rental arrears to be ~S$3.8m.

This works out to an estimated increase of 0.19 S cent or 4.3% in its FY12 DPU. SGREIT intends to distribute substantially the net arrears received from Toshin in 1Q13, on top of the regular distributable income generated for the quarter.

This is in line with our view as per our 5 Feb report that SGREIT may possibly get a boost in its DPU should the outcome from the rent review turns out to be favourable.