Tuesday, October 29, 2013

Starhill Global REIT: Delivering as promised (OCBC)

Starhill Global REIT:
Fair value S$0.95
add: 12m dividend forecast S$0.050
versus: Current price S$0.82

Delivering as promised
• 3Q13 DPU up 9.0% YoY
• Strong results from Singapore and Australia
• No refinancing needs till 2015

Starhill Global REIT (SGREIT) reported 3Q13 DPU of 1.21 S cents, up 9.0% YoY. This brings the 9M13 DPU to 3.77 S cents, in line with our expectations. SGREIT’s Singapore portfolio continued to benefit from Wisma Atria (WA) redevelopment and upward rent reviews at Ngee Ann City (NAC).
For its overseas properties, Australia portfolio was the key performer, raking up a 25.7% increase in NPI due to incremental income from Plaza Arcade. This more than offset the lower contributions from the other overseas properties due to unfavourable forex movements and increased competition. On the capital management front, we note that SGREIT has completed the drawdown of new unsecured loan facilities to refinance its debts due in 2013, leaving it with no refinancing needs until Jun 2015. As at 30 Sep, gearing stood largely unchanged at 30.6%, while the fixed/hedged debt ratio improved to 94.0% from 81.0% seen in 2Q. We maintain BUY and S$0.95 fair value on SGREIT as we continue to like its clear growth drivers, robust financial standing and compelling valuation.

3Q13 results within view
Starhill Global REIT (SGREIT) reported 3Q13 NPI of S$38.0m and distributable income of S$27.1m, up 4.4% and 9.7% YoY respectively. DPU similarly increased by 9.0% YoY to 1.21 S cents, after retaining S$0.7m (c. 0.03 S cents) in distribution amount. For 9M13, NPI and distributable income were up 7.3% and 17.2% to S$119.0m and S$83.6m respectively. 9M13 DPU came in at 3.77 S cents, translating to a robust growth of 15.6%. This is in line with expectations, given that the DPU has met 76.6%/76.9% of our/consensus FY13F DPU.

Further improvement in operational performance
SGREIT’s Singapore portfolio continued to benefit from Wisma Atria (WA) redevelopment and upward rent reviews at Ngee Ann City (NAC). Over the quarter, WA saw its retail NPI grow by 5.9% YoY as a result of ongoing asset repositioning and higher rentals. Tenant sales at WA, we note, improved 11.8% YoY, giving rise to a better sales efficiency of S$134 psf. At NAC’s retail segment, NPI also registered a strong 14.5% growth following the 6.7% rental uplift from Toshin master lease. In addition, the office segment at Singapore portfolio achieved 11.2% NPI growth on the back of positive rental reversions of 13.7% for leases committed between Oct 2012 and Sep 2013. More notably, Singapore portfolio occupancy reached 100%, up from 99.7% in 2Q. For its overseas properties, Australia portfolio was the key performer, raking up a 25.7% increase in NPI due to incremental income from Plaza Arcade. As a result, this more than offset the lower contributions from the other overseas properties due to unfavourable forex movements and increased competition.

Maintain BUY
On the capital management front, we note that SGREIT has completed the drawdown of new unsecured loan facilities to refinance its debts due in 2013, leaving it with no refinancing needs until Jun 2015. As at 30 Sep, gearing stood largely unchanged at 30.6% (30.3% in 2Q), while the fixed/hedged debt ratio improved to 94.0% from 81.0% seen in 2Q. We continue to like SGREIT for its clear growth drivers, robust financial standing and compelling valuation. Maintain BUY and S$0.95 fair value on SGREIT.


Source/Extract/Excerpts/来源/转贴/摘录: OCBC-Research,
Publish date: 28/10/13

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Warren E. Buffett(沃伦•巴菲特)
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高估期间, 卖对, 不卖也对, 买是错的。
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Tan Teng Boo


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合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
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