Starhill Global REIT Review @ 7 August 2023

Basic Profile & Key Statistics

• Main Sector(s): Retail & Office
• Country(s) with Assets: Singapore, Australia, Malaysia, Japan & China
• No. of Properties (exclude associate/fund): 9

Key Indicators

Performance Highlight

Gross revenue, NPI, income available for distribution, distribution to unitholders and DPU declined slightly YoY mainly due to the divestment of Daikanyama and foreign exchange. The retention amount is lower this time resulting is a lower DPU decline.

Shopper Traffic & Tenant Sales

For Wisma Atria, both tenant sales and shopper traffic have improved YoY.

Divestment

In January, SGREIT divested Daikanyama and the proceeds have been used to repay borrowing in Yen.

Asset Enhancement Initiative

At Myer Centre Adelaide, phase 2 of facade upgrading works started in April and is expected to be completed by the end of 2023.

The interior upgrading work at the basement of Wisma Atria is expected to start in August and is targeted to complete by March 2024. 

Related Parties Shareholding

• REIT Sponsor's Shareholding: Above median by 20% or more
• REIT Manager's Shareholding: Above median by 20% or more
• Directors of REIT Manager's Shareholding: Below median by 20% or more

Lease Profile

• Committed Occupancy: ± 5% from median
• Income in SGD/Major Currencies: Below median by 10% or more
• WALE: Above median by 10% or more
• Highest Lease Expiry within 5 Years: Above median by 20% or more; Falls in FY24/25
• Weighted Average Land Lease Expiry: Below median by 10% or more

Debt Profile

• Gearing Ratio: ± 10% from median
• Gearing Ratio including Perps: ± 10% from median
• Cost of Debt: ± 10% from median
• Fixed Rate Debt %: Above median by 10% or more
• Unsecured Debt %: ± 10% from median
• WADM: Above median by 10% or more
• Highest Debt Maturity within 5 Years: Below median by 20% or more; Falls in FY25/26
• Interest Coverage Ratio: ± 10% from median

Diversification Profile

• Top Geographical Contribution: Above median by 10% or more
• Top Property Contribution: Above median by 20% or more
• Top 5 Properties' Contribution: Above median by 20% or more
• Top Tenant Contribution: Above median by 20% or more
• Top 10 Tenants' Contribution: Above median by 20% or more

Key Financial Metrics

• Property Yield: ± 10% from median
• Management Fees over Operating Distributable Income: ± 10% from median; $5.78 distribution for every dollar paid 
• Operating Distributable Income on Capital: ± 10% from median
• Operating Distributable Income Margin: ± 10% from median
• Operating Distribution Proportion: Above median by 5% or more

DPU Breakdown

• TTM DPU Breakdown:
• 96.3% from Operation
• 3.7% from Management Fees Paid in Units

• TTM DPU = 96.2% of Distributable Income

Trends

• Slight Uptrend: Property Yield
• Flat: Committed Occupancy, Operating Distributable Income on Capital, Operating Distributable Income Margin
• Downtrend: DPU from Operation, NAV per Unit, Interest Coverage Ratio

Relative Valuation

• Dividend Yield: Above +1SD for 1y, 3y & 5y
• P/NAV: Average for 1y, 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 Top Geographical Contribution
High Committed Occupancy	High Top Property & Top 5 Properties' Contributions
Long WALE	High Top Tenant & Top 10 Tenants' Contributions
High Fixed Rate Debt %	DPU from Operation Downtrend
Long WADM	NAV per Unit Downtrend
Well Spread Debt Maturity	Interest Coverage Ratio Downtrend
High Operating Distribution Proportion

Compared to the previous half-yearly period, the DPU has improved, even though gross revenue and NPI remain similar. This improvement can be attributed to lower tax expenses and lower retention for working capital. Regarding the debt profile, only 0.3% of the debt requires refinancing in the next 12 months. Moreover, with 83.4% of the debt at a fixed rate, any further increase in interest expenses is expected to be minimal.

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 Review - List of previous REIT review 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: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my own findings and should not be considered as professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decisions.