Starhill Global Reit

Starhill Global Reit: 3Q12 results inline. Revenue at $46.3m, flat qoq, +5% yoy. DPU at 1.11 cts, +2.8% qoq, +11% yoy. The boost came from Wisma, which asset enhancement (AEI) was completed in 2Q12 with all Orchard road fronting stores commencing business. It was officially relaunched on 6 Sep, and enjoyed +2.7% qoq and +18.6% yoy increase in retail revenue on strong rental reversion and full committed occupancy. Avg passing rent is estimated to have risen 2.2% qoq to $35.04 psf/mth this quarter. Wisma’s retail and office occupancy were at 100% / 97.7%, vs 99.5% / 99% last qtr. Ngee Ann City retail maintained at full occupancy, while Ngee Ann City office occupancy remained flat at 98%. On the Toshin rental review, 3 independent valuers are now being designated for the rent valuation. Toshin has exercised its option to renew NAC retail for another 12 yr term, expiring 2025. The next rent review will be in 3 yrs time. Toshin constitutes 85.2% of NAC retail gross rent and is SGREIT’s largest tenant at 18.8% of portfolio gross rent. 3Q12 avg passing rent at NAC retail stayed at depressed levels of an estimated $13.69 psf/mth , with marginal increment expected until the next rent review. Additionally, see yday’s 2.01pm post on sponsor YTL’s intention to expand SGREIT’s presence in China. Maybank Kim Eng Research reiterates Buy with TP $0.85, 5.7% FY13e yield, continues to like SGREIT for the rental upside at Wisma Atra and income stability in Msia and Australia. CIMB maintains Neutral, raises TP to $0.81 from $0.75.