Starhill Global REIT Review @ 8 November 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

Key Indicators

Performance Highlight

Gross revenue and NPI have improved yoy mainly due to the cessation of rental rebates following the completion of asset enhancement works at The Starhill and lower rental assistance.

Tenant Sales and Shopper Traffic

For Wisma Atria, shopper traffic is similar to the previous quarter, however, tenant sales has declined as compared to the previous quarter.

Asset Enhancement Initiative

The AEI work for Wisma Atria is targeted to be completed by December 2022.

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

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 20%; $5.56 distribution for every dollar paid 
• Distribution on capital: Below median for more than 10%
• Distribution margin: ± 10% from median

Trends

• Slight Uptrend: Occupancy
• Slight Downtrend: Property Yield, Distribution Margin
• Downtrend: DPU, NAV per Unit, Interest Coverage Ratio, Distribution on Capital

* Interest coverage ratios between 1Q 2021 to 3Q 2021 are estimated to include perpetual securities.

Relative Valuation

• Current 52 Weeks Range: 20%
• P/NAV: Below -2SD for 1y; Average for 3y; Below average for 5y
• Dividend Yield: Above +2SD for 1y; Above +1SD for 3y & 5y

Author's Opinion

Favorable	Less Favorable
Diversified Sector	Low Directors of REIT Manager's Shareholding
High REIT Sponsor's Shareholding	Concentrated Lease Expiry
High REIT Manager's Shareholding	High Cost of Debt
Long WALE	Low Interest Coverage Ratio
High Fixed Rate Debt %	High Top Geographical Contribution
Long WADM	High Top Property &Top 5 Properties Contributions
Well Spread Debt Maturity	High Top Tenant & Top 10 Tenants Contributions
	Non-Competitive Management Fees
	Low Distribution on Capital
	DPU Downtrend
	NAV per Unit Downtrend
	Interest Coverage Ratio Downtrend
	Distribution on Capital Downtrend

The performance is similar to the previous quarter. The interest coverage ratio is improving despite the increasing interest rate. Moving forward, the festive season in December should help to boost 1H FY22/23 performance.

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

And you could join the following to support my work:

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

REIT-TIREMENT Patreon - Support my work and get exclusive content

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 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.