REIT-TIREMENT - REITs Investing & Personal Finance

REITs investment & personal finance


Tuesday, May 11, 2021

Starhill Global REIT Review @ 11 May 2021

Basic Profile & Key Statistics

Starhill Global REIT (SGREIT) invests in retail and office properties which currently owns 10 properties across Singapore, Australia, Malaysia, Japan and China.

Performance Highlight

Gross revenue decreased by 0.6% YoY but NPI increased by 0.6% YoY.
For Wisma Atria, tenants' sales and shopper traffic improved to 83.4% and 74.2% of pre-circuit breaker level.
AEI for The Starhill is expected to complete by December 2021. Besides this, Wisma Atria has also commenced interior upgrading works at its common area.


Related Parties Shareholding

  • REIT sponsor's shareholding is high at 37.55%
  • REIT manager's shareholding is high at 1.6%
  • Directors of REIT manager's shareholding is low at 0.01%

Lease Profile

  • Occupancy is slightly high at 95.5%
  • WALE is long at 5.4 years
  • Highest lease expiry within 5 years is high at 56.8% which falls beyond FY23/24, without breakdown
  • Weighted average land lease expiry is moderate at 61.69

Debt Profile

  • Gearing ratio is moderate at 35.9%
  • Cost of debt is high at 3.21%
  • Fixed rate debt % is high at 89%
  • Unsecured debt % is moderate at 77.2%
  • WADM is slightly long at 3.1 years
  • Highest debt maturity within 5 years is high at 35% which falls in FY22/23
  • Interest coverage ratio is low at 2.5 times
  • Preferred/perpetual securities over debts is moderate at 8.2%

Diversification Profile

  • Top geographical contribution is high at 61.5%
  • Top property contribution is high at 33.8%
  • Top 5 properties contribution is high at 91.2%
  • Top tenant contribution is high at 22.2% 
  • Top 10 tenants contribution is high at 58.6% 
  • Top 3 countries contribution is from Singapore, Australia and Malaysia which contribute more than 95% of GRI

Key Financial Metrics

  • Property yield is low at 4.2% 
  • Management fees over distribution is high at 26.9% in which unitholders receive S$ 3.72 for every dollar paid 
  • Distribution on capital is low at 1.9%
  • Distribution margin is low at 32.9%
Include retention, management fees over distribution, distribution on capital and distribution margin would be 24.9%, 2% and 35.6% respectively.

Trends

  • Downtrend - DPU, NAV per Unit, Interest Coverage Ratio, Property Yield, Distribution on Capital, Distribution Margin

Relative Valuation

  • Dividend Yield - Latest 4 quarters DPU @ 2.58 cents / average yield @ 6.21% = S$ 0.415. Include retention, DPU @ 2.78 translates into S$ 0.45
  • Price/NAV - NAV @ S$ 0.82 x average P/NAV @ 0.77= S$ 0.63


Author's Opinion

 Favorable Less Favorable
Diversified SectorHigh Directors of REIT Manager's Shareholding
High REIT Sponsor's ShareholdingHigh Cost of Debt
High REIT Mponsor's ShareholdingConcentrated Debt Maturity
Long WALELow Interest Coverage Ratio
High Fixed Rate Debt %High Top Geographical Contribution
 High Top Property & Top 5 Properties Contributions
 High Top Tenant & Top 10 Tenants Contributions
 Low Property Yield
 Non-Competitive Management Fee
 Low Distribution on Capital
 Low Distribution Margin
 DPU Downtrend
 NAV per Unit Downtrend
 Interest Coverage Ratio Downtrend
 Property Yield Downtrend
 Distribution on Capital Downtrend
 Distribution Margin Downtrend

SGREIT performance has improved slightly as compared to the previous quarter. However, the recent new restriction in Singapore and MCO in KL may impact SGREIT performance again.


For more information, you could refer to:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

REIT-TIREMENT Patreon - Support as a Patron and get SREITs Dashboard PDF or Data Excel

REIT-TIREMENT Facebook Page - Support by liking my Facebook Page

REIT Investing Community - Facebook Group where members share and discuss REIT topic


*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions and loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.

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