Starhill Global REIT to appeal court decision

Starhill Global REIT will be filing an appeal against the High Court’s decision to dismiss its application to declare that the rent review mechanism in its lease agreement with Toshin is “not operable”.

Toshin is the property arm of Japan-based retailer Takashimaya.

Starhill has a 27.23 per cent stake in Ngee Ann City.

Under a lease agreement, Toshin is the master tenant occupying the retail areas from basement two to level four of the complex.

Under the terms of the Toshin lease, the rent review mechanism determines whether the rate for the next rental term of two years commencing June 8 is to increase – not exceeding a 25 per cent increase from current rates – or to remain at the current rates.

On May 13, Starhill made an application to the High Court to declare that the rent review mechanism was not operable.

In a statement filed with Singapore Exchange Sunday, Starhill said that at the hearing on September 2, the High Court dismissed the application and said both parties could apply to the court should there be a dispute.

In an earlier statement, Starhill said that if the new rent has not been determined prior to the commencement of the next rental term, the Toshin lease provides that the current rent will continue to apply during the next rental term until the new rent has been determined.

However, the rent shall be adjusted retrospectively from the date of commencement of the next rental term as soon as the new rent has been determined, and any accumulated arrears of rent shall be paid by Toshin.

Starhill said it would announce further updates when developments arise.

Source : Channel NewsAsia – 5 Sep 2011

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