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Well, there are similarities.Investor point of view is that one is mainly for capital gain with lower yields in return and vice-versa for the other one, i.e. reits.
epliew ( Date: 02-Sep-2010 19:39) Posted:
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This Q will see an increase in divs distribution due to inclusive of Mal ppty after acquisition.
Hmm.... bollinger band is tightening, may signal a greater price movement is on the card.
Starhill Global REIT: BUY; S$0.59
Stable performance, refinancing done
Price Target : S$ 0.73
by: Derek TAN CPA +65 6398 7966
and Munyee LOCK +65 6398 7972
At a Glance
2Q10 DPU of 0.91 Scts in line, down 4% yoy
Re-financing of near term debt done
Maintain BUY and TP S$0.73
Comment on Results
2Q10 DPU of 0.91 Scts. Gross revenues and net property income were higher
by 11.4% yoy and 7% yoy to S$37.2m and S$28.8m respectively. The better
performance was mainly attributed to a full quarter’s contribution from
David Jones asset (DJA) slightly offset by lower office revenues and weaker
RMB/S$ exchange rate. Interest costs were 22% higher yoy due to the loan
taken for DJA acquisition. As such, distributable income came in at S$18.0m
(-4% yoy), translating to a DPU of 0.91 Scts.
Stable earnings profile in 2Q10 but overseas portfolio performance hit by
strengthening S$. Stable 2Q performance reflected the resilient retail
portfolio in Singapore +4% yoy. However, this was offset by lower office
occupancies (-3%yoy) and overseas properties’ earnings were down 2%,
excluding DJA, due to weaker RMB/S$. In RMB terms, Chengdu reported 8%
higher gross sales.
Bullet loan expiring in 2010 settled. Apart from S$124m MTN issuance
recently, SGREIT has also completed its refinancing of near term expiring
debt with a new 3-year facility of S$496m, secured over SGREIT’s interest
in Ngee Ann City, with a consortium of 5 banks. Interest costs is expected
to inch up to 3.5-3.6% post refinancing.
Recommendation
Maintain BUY, TP S$0.73 with prospective yields of 6.7-7.5%. At a P/BV of
0.7x, SGREIT is trading below its Sreit peers average of 1.0x. Forward
yields of 6.7-7.5% are attractive.
DATE OF RELEASE OF STARHILL GLOBAL REIT’S FINANCIAL STATEMENTS FOR
SECOND QUARTER 2010 AND FIRST HALF YEAR ENDED 30 JUNE 2010
YTL Starhill Global REIT Management Limited (“Manager”), the manager of Starhill Global Real Estate
Investment Trust (“Starhill Global REIT”), wishes to announce that it will release Starhill Global REIT’s financial statements for the second quarter 2010 and first half year ended 30 June 2010 on Monday, 26 July 2010 after market close.
For those interested in high dividends yield and undervalue reit, here are the latest Buy call from OCBC & Daiwa :
StarHill Gbl – Daiwa
Valuation discount persists
Rating
maintained
• We
maintain our 2 (Outperform) rating and
six-month target price of S$0.70, based on parity to our RNG valuation
(a finitelife Gordon Growth model. We believe Starhill Global’s discount
to the other retail-property S-REITs is unjustified. It is currently
trading at sustainable DPU yields of more than 7% based on our FY10-12
forecasts.
Major
risk: overcoming its perception problem
• We
believe the sponsor, Malaysia’s YTL group (Not rated), has a perception
problem. The injection of two Malaysian assets, Starhill Gallery and
Lot 10, from the sponsor’s Malaysian REIT at a net-property
income yield of 6.8% with a tax-efficient assetbacked securitisation
structure, has received, at best, a lukewarm reception from the market
so far, in our view. We believe the negative perception does not justify
Starhill Global’s valuation discount, although it might take some time
for investors to become more comfortable with the sponsor. We believe
more clarity on how the assets perform after the acquisition and the
leadership of new CEO, Ho Sing, appointed by the sponsor, could go a
long way to dispelling the negative perceptions.
Orchard
Road supply concern is receding
• We believe the stronger-than-expected absorption of new retail space last year and the modest level of forthcoming supply for the primary shopping area are positive for Starhill Global. As long as Wisma Atria and Ngee Ann City remain relevant (another opportunity for management to prove itself), we expect them to attract their fair share of quality tenants.
StarHill Gbl – OCBC
Compelling investment case; initiate with BUY rating
High
quality assets. Starhill Global REIT (Starhill) owns 13
properties across five countries with retail and office components.
Starhill derives some 60% of its gross revenue from Singapore, where it
holds stakes in Wisma Atria and Ngee Ann City,
landmark assets on Orchard Road, Singapore’s premier shopping street.
Other assets including the newly acquired Malaysia assets are also in
high traffic, central locations, with mid-high end or luxury
positioning.
Strong
sponsor. Sponsor YTL Corporation Berhad (YTL), one of the
largest listed companies on the Bursa Malaysia, holds a 28.8% stake in
Starhill. YTL has clearly outlined its vision for Starhill as its main
platform for ownership of prime retail and commercial properties in the
Asia-Pacific region. The benefit is not just in terms of indirect and/or
direct financial support – YTL has strong relationships with major
global retailers such as Moet Hennessy Louis Vuitton (LVMH) and the
Swatch Group.
Stable
income profile with growth potential. Starhill enjoys a number
of long-tenure leases and master leases that provide long-term income
stability to the REIT along with potential for rental upside.
Approximately 42% of Starhill’s revenue is derived from such leases
(including the Malaysia assets). While we still see weakness in the
local office market (estimated 13% of gross revenue), we believe retail
sales will be on an uptrend in most of Starhill’s operating markets as
those countries emerge from recession and begin to experience economic
growth. We also see scope to grow income through asset enhancement
initiatives and acquisitions.
Compelling investment case.Starhill is trading at a 34% discount to its book value (as of 31 Mar 2010). This compares favorably to Singapore-only retail and diversified retail/office REITs and overseas-only retail REITs which are trading at an average 1.0x and 0.8x price-to-book respectively. We believe the significant discount is unjustified when considering Starhill’s high-quality assets, healthy balance sheet and its strong sponsor. We value Starhill using our DDM-based valuation model, assuming a discount rate of 6.7% and a conservative terminal growth rate of 0.5%. This yields a fair value estimate of S$0.65, which is fairly reasonable, in our view, at only 0.79x price-to-book. This also translates to an estimated upside of 19% to the current price and an estimated total return of 26%. We initiate coverage of Starhill with a BUY rating. Key risks to our view include macro-economic headwinds, increasing competition in the retail space, foreign exchange risk and changing regulatory and taxation regimes.
Farmer ( Date: 04-Jul-2010 22:45) Posted:
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MikeL2009 ( Date: 05-Jul-2010 15:45) Posted:
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I'd always maintained this is a good counter to hold on to and collect dividend and wait for the price to rise when the economy recovers. Before the dilution, dividend was around 190s... even with dilution you get $95 every 3 mths. That is hell lot better than leaving your money with FD, SD, even most unit trusts.
Farmer ( Date: 09-Jun-2010 11:19) Posted:
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Haha! OCBC initial a Buy call with Fair value at 65cts....
http://www.remisiers.org/research//Starhill-100702-OIR.pdf
Starhill Reits listed in Malaysia is the biggest player there till the listing of SunwayReits and it delivers stable and attractive yield over the years to its shareholders under the YTL flagship. Since SGReits was taken over, we expect the same and more exciting things to happen. With the completion of recent M&A from Perth-KL, dividends yield will surely improve. This one is definately worth those who are looking for stable & attractive yield of ~7% at current price over the medium - long term.