Thursday, February 6, 2014

Starhill Global REIT: Consistent performer (OCBC)

Starhill Global REIT:
Fair value S$0.90
add: 12m dividend forecast S$0.051
versus: Current price S$0.76
Consistent performer

Starhill Global REIT (SGREIT) reported an 8.8% YoY growth in its 4Q13 DPU to 1.23 S cents, coming in within our expectations. For the quarter, Singapore portfolio continued to deliver good performance, thereby increasing its percentage revenue contribution to 65.5% from 63.0% in 4Q12. Notably, Ngee Ann City retail NPI gained 16.6% YoY amid 6.7% rental uplift from Toshin master lease renewal in 2Q. In addition, SGREIT saw a S$137.5m revaluation gain in its portfolio. As a result, gearing ratio improved by 1.6ppt QoQ to 29.0%, while book value rose by 7.3% QoQ to S$0.92. This implies a 0.82x P/B, the lowest within the local retail space. We maintain BUY on SGREIT, but revise our fair value to S$0.90 from S$0.95 to reflect higher risk-free rate and risk premium assumptions.


Closing FY13 on strong note
Starhill Global REIT (SGREIT) turned in a firm set of 4Q13 results last Friday. NPI rose by 3.4% YoY to S$38.8m due to higher contribution from Singapore properties and Plaza Arcade acquired in 1Q13, while distributable income climbed 9.5% to S$27.2m. DPU was up 8.8% YoY to 1.23 S cents, after retaining S$0.5m (c. 0.02 S cents) for working capital. This brings the FY13 DPU to 5.00 S cents (+13.9%), in line with our annual DPU forecast of 4.95 S cents (consensus: 4.90 S cents). Based on last traded price, DPU yield was at 6.6%, higher than the average yield of 5.7% seen among its domestic retail peers.

Sustained growth in Singapore portfolio
Singapore portfolio continued to deliver good performance, thereby increasing its percentage revenue contribution to 65.5% from 63.0% in 4Q12. Notably, Ngee Ann City retail NPI gained 16.6% YoY amid 6.7% rental uplift from Toshin master lease renewal in 2Q. In addition, Wisma Atria retail NPI saw a 5.0% increase, driven by positive rental reversion of 8.1% in 2013 and ongoing asset repositioning post refurbishment works. We understand that tourism growth and positive consumer sentiment had improved tenant sales by 20.0% in 2013, translating to an improved sales efficiency of S$138 psf at the mall. Within Singapore office space, SGREIT benefitted from healthy demand and limited office supply in Orchard Road, hence helping to push the office NPI up by 11.5% YoY (+12.3% reversion in 2013). Together with a 23.2% growth in NPI from SGREIT’s Australia properties, this had outweighed softness in its other overseas assets, which was dragged down by unfavourable forex movements, divestment and increased competition.

Maintain BUY
For the quarter, SGREIT also saw a S$137.5m revaluation gain in its portfolio. As a result, gearing ratio improved by 1.6ppt QoQ to 29.0%, while book value rose by 7.3% QoQ to S$0.92. This implies a 0.82x P/B, the lowest within the local retail space. We maintain BUY on SGREIT, but revise our fair value to S$0.90 from S$0.95 to reflect higher risk-free rate and risk premium assumptions.



Source/Extract/Excerpts/来源/转贴/摘录: OCBC-Research,
Publish date: 24/01/14

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Warren E. Buffett(沃伦•巴菲特)
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别人贪婪时我恐惧, 别人恐惧时我贪婪
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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


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
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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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1.有智慧,不如趁势
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成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
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