SINGAPORE (July 31): Religare continues to rate Starhill Global REIT “buy” at a target price of 88 cents, in view of a stable outlook coupled with what the research house deems an attractive FY18 yield of 6.8%.
See: Starhill Global REIT 4Q DPU falls 8.5% to 1.18 cents
This comes after the REIT manager on Friday declared a 4Q distribution per unit (DPU) of 1.18 cents, down 8.5% from 1.29 cents a year ago – bringing FY16/17 DPU to 4.92 cents, which represents a 5% decline from its full-year DPU of 5.18 cents in the previous year.
In a Monday report, analyst Ti Wee Pang says Starhill Global’s 4Q results were in line with Religare’s estimates as its FY17 revenue and DPU accounted for 98% of its full-year forecasts.
Noting flat portfolio revaluation, and that Singapore’s assets cap rates were compressed by 40bps during its latest round of revaluation exercise, the analyst expects the REIT to continue delivering growth via its redevelopment project at Plaza Arcade – while any weakness will be mitigated by higher rental from its master leases.
“Looking ahead, Starhill Global will be focusing on the redevelopment of Plaza Arcade in Perth (completion slated for 1Q18). Starhill Global currently offers a FY18E yield of 6.8%, which si still the highest among retail REITs,” says Ti.
Units in Starhill Global are trading 0.5 cent higher at 78 cents as of 12.54pm.