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Tuesday, May 17, 2022

Starhill Global REIT Review @ 17 May 2022

Basic Profile & Key Statistics
  • Main Sector(s): Retail & Office
  • Country(s) with Assets: Singapore, Australia, Malaysia, Japan & China
  • No. of Properties (exclude development/associate/fund): 10

Performance Highlight

Gross revenue and NPI have improved yoy mainly due to cessation of rental rebate after the AEI completion of The Starhill as well as lower rental assistance to tenants.

Tenant Sales and Shopper Traffic
For Wisma Atria, both shopper traffic and tenant sales have increased yoy, albeit lower than December festive period. 

Asset Enhancement Initiative
Facade work for Myer Centre Adelaide has started and is expected to complete by 3Q 2022.

Upgrading works for bubble lifts, lobbies on carpark floors and washroom have been completed. Main retail area works including refurbishment of common corridors, atrium void, concierge, etc have started in March and are expected to be completed by December.

Related Parties Shareholding

  • REIT sponsor's shareholding: Above median for more than 20%
  • REIT manager's shareholding: Above median for more than 20%
  • Directors of REIT manager's shareholding: Below median for more than 20%

Lease Profile

  • Occupancy: ± 5% from median
  • WALE: Above median for more than 10%
  • Highest lease expiry within 5 years: Above median for more than 20%; Falls in FY24/25 and beyond, without breakdown
  • Weighted average land lease expiry: Below median for more than 10%

Debt Profile

  • Gearing ratio: ± 10% from median
  • Gearing including perps: ± 10% from median
  • Cost of debt: Above median for more than 20%
  • Fixed rate debt %: Above median for more than 20%
  • Unsecured debt %: ± 10% from median
  • WADM: Above median for more than 20%
  • Highest debt maturity within 5 years: Below median for more than 20%; Falls in FY25/26
  • Interest coverage ratio: Below median for more than 20%

Diversification Profile

  • Top geographical contribution: Above median for more than 10%
  • Top property contribution: Above median for more than 20%
  • Top 5 properties' contribution: Above median for more than 20%
  • Top tenant contribution: Above median for more than 20%
  • Top 10 tenants' contribution: Above median for more than 20%

Key Financial Metrics

  • Property yield: ± 10% from median
  • Management fees over distribution: Above median for more than 10%; $5.56 distribution for every dollar paid 
  • Distribution on capital: Below median for more than 10%
  • Distribution margin: ± 10% from median

Trends

  • Downtrend: DPU, NAV per Unit, Property Yield, Interest Coverage Ratio, Distribution on Capital, Distribution Margin
* Interest coverage ratios between 1Q 2021 to 3Q 2021 are estimated to include perpetual securities.

Relative Valuation

  • P/NAV: Below average for 1y; Average for 3y & 5y
  • Dividend Yield: Average for 1y; Above average for 3y & 5y

Author's Opinion

 Favorable Less Favorable
Diversified SectorLow Directors of REIT Manager's Shareholding
High REIT Sponsor's ShareholdingHigh Cost of Debt
High REIT Manager's ShareholdingLow Interest Coverage Ratio
Long WALEHigh Top Geographical Contribution
High Fixed Rate Debt %High Top Property & Top 5 Properties Contributions
Long WADMHigh Top Tenant & Top 10 Tenants Contributions
Well Spread Debt MaturityNon-Competitive Management Fees
 Low Distribution on Capital
 DPU Downtrend
 NAV per Unit Downtrend
 Property Yield Downtrend
 Interest Coverage Ratio Downtrend
 Distribution on Capital Downtrend
 Distribution Margin Downtrend

The performance improvement in this quarter mainly comes from a higher contribution from The Starhill in Malaysia after the completion of AEI in December 2021. With the relaxation of COVID-19 restrictions as well as border re-opening in Singapore, Malaysia and Australia, SGREIT performance is expected to be improved moving forward.


You could also refer below for more information:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts


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Singapore REITs Post Telegram Channel - Join to receive posts for Singapore REITs

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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 due to 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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