Author: tfwee

 

StarHill – SGX
NOTICE OF RIGHTS ISSUE BOOKS CLOSURE DATE

Further to the announcement dated 22 June 2009 made by YTL Pacific Star REIT Management Limited, as manager of Starhill Global Real Estate Investment Trust (“Starhill Global REIT” and as manager of Starhill Global REIT, the “Manager”), in connection with the proposed fully underwritten renounceable rights issue (the “Rights Issue”) of 963,724,106 new units in Starhill Global REIT (“Rights Units”), the Manager wishes to announce that the Transfer Books and Register of unitholders of Starhill Global REIT (“Unitholders”) will be closed on 21 July 2009 at 5.00 p.m. (the “Rights Issue Books Closure Date”) for the purpose of determining the provisional allotments of Rights Units of Eligible Unitholders1 under the Rights Issue.

In connection with the Rights Issue, Eligible Unitholders will receive their provisional allotments of Rights Units on the basis of one Rights Unit for every one existing Unit2 held by each Eligible Unitholder as at the Rights Issue Books Closure Date.

Starhill Global REIT’s current policy is to distribute its distributable income on a quarterly basis to Unitholders. The Rights Units will, upon allotment and issue, rank pari passu in all respects with the existing Units in issue as at the date of issue of the Rights Units, including the right to any distributions which may accrue for the period from 1 July 2009 to 30 September 2009 as well as all distributions thereafter.

July 13, 2009 StarHill No Comments »

FCT – DBS

Stability and Growth

• Earnings booster from completion of Northpoint AEI
• Primed for growth from potential pipeline
• BUY for growth + stability, TP of S$0.97 offers 18% total return
Northpoint AEI is almost completed. Asset enhancement works (AEI) at Northpoint is expected to complete soon with tenants currently fitting out their premises. Committed and leased out space accounts for c. 94% of total net lettable area (NLA). Post completion, FCT’s net property income (NPI) will be lifted by 7% from FY10 onwards.
Portfolio exhibits resilience. FCT has (i) secured c.96% of FY09 income, and (ii) maintained positive rental reversions albeit at a tighter spread, given the tough operating climate. Renewals in 3Q09-FY10 account for c.15% of rental income, mostly from Causeway Point, its largest asset. We expect renewal activities to remain stable given strong pedestrian traffic at FCT’s various malls.
Asset injections are a possibility in the medium term. Based on latest closing share price, FCT is trading at an implied property yield of c6.3%-6.8%, which is reasonable against its property yield of 6%. However, it remains higher than our estimated 5.0% -6.5% NPI yield for its targeted asset, Northpoint 2, based on valuation detailed in its put-call option back in Oct 07. While management remains keen to inject this asset, they have re-iterated that any deal would
have to be yield accretive to the portfolio and to unitholders. In addition, other than Northpoint 2, Yew Tee Point, another sub-urban mall, has recently been completed. If these 2 assets are injected into FCT, its portfolio NLA could potentially grow by up to c.23%.
Maintain BUY, TP S$0.97. FCT currently offers an absolute return of 18%, backed by a stable FY09F-10F stable yield of 8%. Further re-rating catalysts will hinge on asset injections.
July 13, 2009 FCT No Comments »

Suntec – DBS

Year of Stability

• 2009 topline supported by resilient office and retail income
• Strong, diversified portfolio
• Near term refinancing concerns removed
• Buy with TP $0.97
Year of stability. The main message that emerged from the meetings was that FY2009 would be a stable year. Topline would be supported by positive office rental reversions and stable retail rental receipts. This would more than offset the slight dip in overall occupancy to 97.4%.
Weaker office rents offset by steady retail rents. Office rents are expected to continue sliding but the pace of decline will decelerate as observed in 2Q09 vs 1Q09. Shadow space at Suntec Office Tower is not as prevalent as some of the nearby buildings as only a third of its tenant mix is from the finance sector. With expiring rents averaging $6.64psf/mth, lease renewals are likely to remain positive in FY09, although at smaller reversion gaps than before. The anticipated opening of 2 new Circle Line MRT stations from mid 2010 is expected to improve Suntec Mall’s accessability. Planned AEI, to be largely funded by the management committee (MCST), will smoothen traffic flow. Interest expense is expected to rise by FY10 when the new refinancing cost kicks in. More importantly, near term debt maturity risks have been removed.
Maintain Buy, TP $0.97. We continue to like Suntec for its healthy balance sheet with gearing of 34%, well spread portfolio and lack of near term refinancing risks. Valuation is inexpensive with DPU yield of 12.1% and 10.4% for FY09 and FY10 respectively, even after assuming a 50% peak/trough decline in office rents and 15% office vacancy level, and P/bk NAV of 0.44x. Our sensitivity analysis indicates that gearing would rise to 45% with a 25% asset devaluation portfolio-wide. The probability of this happening is low, with 40% of its portfolio value exposed to more stable retail assets.
July 13, 2009 Suntec No Comments »

REITs – CIMB

Investment summary

• S-REITs have rebounded by 56% from March low, in line with 60% for the STI. The S-REIT sector has rebounded strongly from its all-time low in Mar 09, attributed to a strong inflow of foreign funds. Correspondingly, yield expectations have abated from an all-time high of 17% to 11%.

• Recapitalised; refinancing concerns largely averted. REITs have gone beyond the successful refinancing of debt to recapitalisations in a bid to strengthen their balance sheets for the recession ahead. Sponsor-backed REITs including Ascendas REIT, CapitaMall Trust, CapitaCommercial Trust, Starhill Global, and Frasers Commercial Trust went to the market and raised a combined S$3bn of equity. Average asset leverage for REITs under our coverage has retreated to 32% from 35%. Interest cover also appears healthy at 4.5x vs. the typical lenders’ requirement of 2x. We consider balance sheets to be relatively healthy.

• Positioned for a recovery. The larger environment looks positive for investing in REITs, underpinned by: 1) expected high liquidity and low interest rates; and 2)the Singapore government’s continued support for the REIT industry.

• We are most optimistic on hospitality and retail sub-sectors, which we believe will be major beneficiaries of the following in 2010: 1) the completion of the two integrated resorts (IRs); 2) a change in the marketing of Singapore as a standalone destination for tourists; 3) an expanded transport infrastructure with more rail lines; and 4) the anticipated return of corporates and expatriates as Singapore grows more cost-competitive against its regional peers.

• Neutral on industrial sub-sector. The outlook for both the manufacturing and logistics industries remains weak, and we expect the businesses of industrialists in factory and warehouse space to be under pressure. We expect occupancy for industrial space to lag behind the actual slowdown in industrial businesses, holding out the downturn for industrial properties for longer.
• Negative on office sector. We expect occupancy to hold up with the return of corporates as Singapore grows more cost-competitive vis-à-vis the region. However, rents are expected to remain under pressure from three continuous years of strong potential supply and shadow space.

• Overweight on S-REITs; top picks are Suntec REIT and CDLH-HT. We retain our Overweight position on REITs. Our top picks are CDL-HT and Suntec REIT on the back of their lower valuations and near-term catalysts. Dividend yields are also attractive at 9% and 10% respectively. CDL-HT’s Singapore concentration makes it the best proxy for a tourism revival in Singapore. Suntec REIT’s Suntec City Developments (87% of gross revenue) is the closest sizeable retail cluster to the Marina Bay Sands IR and one of the major beneficiaries of two MRT stations opening next to it. We also have Outperform ratings for FCT, ART, PLife, and CREIT.

Link – Table
July 10, 2009 REIT No Comments »

MIREIT – SGX

MacarthurCook Industrial REIT (“MI-REIT”)

MacarthurCook Investment Managers (Asia) Limited (“the Manager”), the Manager of MI-REIT refers to the SGX announcement made yesterday (Announcement titled “MacarthurCook Board to recommend increased offer from AIMS”).

MacarthurCook Limited is the parent company of the Manager.

The Manager wishes to assure unitholders that the AIMS offer does not represent an offer to acquire units in MI-REIT nor does it directly impact the current operation of MI-REIT.

July 10, 2009 AIMSAMPIReit, MI-REIT No Comments »