Starhill Global Reit

[valueinvestor]

Hope not many in this forum miss this, 0.745 now. Still going strong.

[tonylim]

Starhill Global REIT: Valuations still attractive : OCBC

Summary: Starhill Global REIT (SGREIT) recently entered into an agreement with its lender ANZ Bank for a A$63m term loan maturing in June 2017.

The new facility will be used to refinance its existing A$63m loan taken up by SGREIT in Jan 2010 to partially fund the acquisition of David Jones Building.

Based on our estimates, SGREIT’s weighted average debt maturity will likely be extended from 1.8 years to ~2.0 years as at end Sep.

In a separate announcement, SGREIT also updated the outcome of its appeal relating to the master lease with Toshin Development Singapore. According to management, the Court of Appeal did not find that the rent review mechanism had been rendered inoperable, as SGREIT had previously declared.

Nevertheless, the Court ordered SGREIT and Toshin to jointly request the President of Singapore Institute of Surveyors and Valuers to appoint three valuation firms to determine the prevailing market rental rates.

Our take on this development is neutral, as we have not factor in any rental upside resulting from a favourable outcome.

We are adjusting our forecasts to reflect the refinancing activity. Our fair value stays unchanged at S$0.79. Maintain BUY.

What do they mean by 'term loan' ? Is it the same as car loan ?

[godjira1]

Term loan just means a loan from the bank, can be for a certain purpose stated (probably), with collateral or without (more likely the former).

[tonylim]

Term loan just means a loan from the bank, can be for a certain purpose stated (probably), with collateral or without (more likely the former).

Sorry to bother you on this .
I thought term loan is a loan that spread over 36 months for a 3 years term loan , that's mean have to make monthly payment, interest plus capital, like the car loan. But I also understand reits don't pay back their capital, they only service the interests of the loans. May I correct on this ? Thanks for your advice in advance.

[dzwm87]

From my understanding, term loan is simply your bank loan. The nominal amount is required to be paid once the term is due. In addition, the borrower will be required to make interest payments over the term period based on agreed interest rates & payment frequency.

All corporations, including REITs, tend to refinance once their bank loan is due. Unless there is ample surplus of cash, it is unlikely a company will pay off its debt without refinancing.

REITs, in this perspective, will of course choose to refinance its debts. With a requirement to pay out at least 90% of its PAT as distribution back to holders, it is hard to see them paying off debts without choosing to refinance. This further made obvious when we consider that REITs have to also expand via property acquisitions or AEIs (more capital needed!)

Hence, it is naturally better to see REITs extending their due payment to a longer period of time as compared to another which is facing due payment in less than a year time.

[Stocker]

Starhill Global REIT: AEI activity came to fruition, By OCBC

Starhill Global REIT (SGREIT) turned in an encouraging set of 3Q12 results yesterday.

While we have expected Wisma Atria retail mall to put on a good showing following the completion of asset redevelopment works, the 24.3% increase in NPI for the segment came in stronger than expected, thanks to positive rental reversions and full committed occupancy at the mall.

Wisma Atria office segment, we note, also performed well, raking up 15.2% growth in NPI. In addition, overall portfolio occupancy remained very healthy at 99.4%, with a weighted average lease term (by NLA) of 7.3 years.

As mentioned in our Sep report, SGREIT had secured the refinancing for its existing A$63m term loan which matures in Jan 2013. With that, SGREIT has no debt refinancing requirement until Sep 2013.

We are tweaking our forecasts to factor in stronger rentals at Wisma Atria. This lifts our fair value from S$0.79 to S$0.84. Maintain BUY.

[valueinvestor]

UOBKH

Starhill Global REIT (SGREIT SP, P40U)

Orchard malls continue to sparkle
Last price: S$0.78
Target Price: S$0.92

Wisma Atria (Wisma) continues to be the jewel in Starhill Global’s retail portfolio. 3Q12 revenue increased, thanks to the rental uplift from Wisma where net property income grew 24.3% yoy after its major renovation.

Overall portfolio occupancy remained resilient at 99.4%. Its Singapore office portfolio is also doing well as office demand continues to remain resilient in Orchard Road due to the tight supply.

With a low gearing of 31.2%, Starhill Global has room to make acquisitions. It had previously indicated it was looking for mostly retail acquisitions in Singapore, Malaysia and China.

Starhill Global is our top pick in the retail segment as it offers the highest forward yield of 5.9% among the retail REITs. We have a BUY and a target price of S$0.92, derived from a dividend discount model.

The stock is trending up and could test S$0.83/0.89 as the next resistance. Support is at S$0.72. We issued a technical buy on 27 Aug 12 with a target price of S$0.81.

[Stocker]

New base rent for agreement with Toshin increase by 6.7%.

[cfa]

YTL advised they will convert its CPUs into shares, YTL's holding will increase from 29.8 to 37%.

[KopiKat]

Looking at their Q2 results which was released today, what's most interesting to me was the impact of the CPU conversion @ $0.7266 by YTL (YTL Hotels & Properties Sdn Bhd and YTL Corporation Berhad),

1. YTL interest raised from 29.38% to 36.27%
2. NAV dropped from $0.97 to $0.88

Looks like the biggest winners are the 2 YTL companies as,

1. Newly converted shares are at a good 15.5% discount to current mkt price of $0.86 ie. Capital Gains if sold
2. CPU was yielding 5.65% vs 5.547% for REIT but at $0.7266, that translates to a Yield = 6.56% ie. Better Yield if not sold
3. Exchange rate gains - CPU was issued on 28 Jun 2010. 173,062,575 CPUs for RM405Mil. S$ has appreciated against RM since then.

Perhaps we should look at YTL....