Sunday, 4 March 2018

Can This REIT Finally Reach For The Stars? Conclusion

Part 1: link

Disclaimer: This blog post is for entertainment purposes only where I share my findings and opinions. It does not constitute any buy or sell recommendation. Always DYODD before making any trade or investment decision.

In my previous blog post, I mentioned the positives and negatives stuff that I read in Starhill Global REIT's latest financial result presentation slides. In this post, I will examine the Technical and DPU aspects.


Price is currently heading down. Next support $0.70.

I actually doubled down when the price hit $0.74.  Both RSI and Stochastics indicated oversold when I bought.


My dividend yield forecast based on purchase price of $0.74 would be around 6.31%.

If we compare the dividend yield with other retail REITs, Starhill Global is more attractive at it's current price. However, the Management has to start proving their ability to unitholders that they have the means to grow the DPU and return value to investors.

Starhill Global's IPO price was $0.767 and it was first listed in 2005. Fast forward to 12-13 years later, the share price didn't make much progress. I hope the Management doesn't turn this REIT into an ah pek aka grandpa stock. Keep longterm until old just for dividend and no capital gain. I believe unitholders would prefer both capital and dividend gain even though this is a REIT.

My Likes:
Low gearing of 35.3% (<45%)
99% of borrowings hedged against interest rate hikes
Trading at discounted price from NAV
Own Overseas Properties (Diversification)
Land Lease of properties are either freehold or long leasehold. The shortest leasehold is a China Property which expires in 40 years!
DPU is currently above 6% (as at 4/3/2018)

My Dislikes:
Dropping DPU
Office Segment not doing well locally
High lease expiry profile for FY2018/19

Moving forward, these few years will be challenging for Starhill Global. So no, I don't think they can reach for the stars.

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