Starhill Global REIT

Starhill Global REIT: OCBC maintains Buy with $0.79 TP. Note that REIT recently entered into an agreement with its lender ANZ Bank for a A$63m term loan maturing in June 2017. The new facility will be used to refinance its existing A$63m loan taken up by SGREIT in Jan 2010 to partially fund the acquisition of David Jones Building. Based on estimates, SG REIT’s weighted average debt maturity will likely be extended from 1.8 yrs to 2.0 yrs as at end Sep. In a separate announcement, SGREIT also updated the outcome of its appeal relating to the master lease with Toshin Development SG. According to mgt, the Court of Appeal did not find that the rent review mechanism had been rendered inoperable, as grp had previously declared. Nevertheless, the Court ordered SGREIT and Toshin to jointly request the President of Singapore Institute of Surveyors and Valuers to appoint three valuation firms to determine the prevailing market rental rates. House take on this development is neutral, as we have not factor in any rental upside resulting from a favourable outcome.