Starhill Global REIT - CGS-CIMB Research 2022-08-02: More Room For Recovery

Starhill Global REIT - More Room For Recovery

  • Starhill Global REIT (SGX:P40U)'s 2H22 and FY22 DPU of S$0.0202 and S$0.038 fell 2.4% and 3.8% y-o-y respectively, and was above estimates, forming 57% and 108% of our FY22F. Excluding the deferred distributable income (DI) paid out in 2HFY21, 2H22 and FY22 DPU was 8.6% and 5.6% higher y-o-y respectively.
  • Starhill Global REIT's FY22 NPI of S$144.7m was 7.4% higher y-o-y due to lower rental rebates and operating expenses, partially offset by reduced retail rental contribution from Wisma Atria and the depreciation of A$ against S$. Despite ongoing renovations, shopper traffic and tenant sales at Wisma Atria rose by 32.1% and 43.6% y-o-y, respectively, in 2H22 due to further reopening.
  • Starhill Global REIT's portfolio occupancy dipped y-o-y from 96.3% to 95.4% as occupancy gains in the Singapore portfolio was wiped out by lower occupancy in the Australian portfolio. Portfolio valuations hit by negative reversions.
  • Impact of higher electricity rates is mitigated by master and anchor tenant leases, which account for ~53% of gross rents and where the tenant is responsible for all utility expenses, as well as contracts locking in utility rates for some of the malls.
  • Starhill Global REIT's gearing is manageable at 36.2% while cost of debt increased q-o-q from 3.06% to 3.18%. 93% of borrowings are hedged, although we understand that some of the interest hedges will be rolling off in Sep 22.
  • FY23 debt maturity pertains to 8-year S$125m 3.4% notes maturing in May 23. Starhill Global REIT's management said that reissuing note for the same tenor would carry a coupon of 4%.
  • FY23/24F DPU forecast for Starhill Global REIT dips after we reduce the percentage of management fees paid in units to reflect recovery in operations. Reiterate ADD rating on Starhill Global REIT with DDM-based target price reduced to S$0.66.

Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @

LOCK Mun Yee CGS-CIMB Research | 2022-08-02
SGX Stock Analyst Report ADD MAINTAIN ADD 0.55 DOWN 0.710

Read also CGS-CIMB's most recent report:
2022-10-31 Starhill Global REIT - Waiting For Committed Leases To Kick In

Check out the most recent target prices at Starhill Global REIT Target Prices. Listing of analyst research reports at Starhill Global REIT Analyst Report.

Relevant links:
Starhill Global REIT Share Price History,
Starhill Global REIT Announcements,
Starhill Global REIT Dividends & Corp Actions,
Starhill Global REIT News Articles


SGX Stock / REIT Search


Trust Bank Referral Code