Starhill Global REIT

Starhill Global REIT: Daiwa lifts target to $0.88 from $0.83 after incorporating the acquisition of the Plaza Arcade retail property in Perth, Australia for A$48 m. The house believes the acquisition is sensible, and would complement the adjacent David Jones Building, already owned by Starhill. Says there could be some revenue opportunities medium-term from integrating the two adjacent properties and deploying underutilized upper-floor space. The acquisition raises Starhill's Australian presence to 7.6% of total assets from 5.5%. Daiwa expects the acquisition to be incrementally DPU accretive at an initial net-property-income yield of 7.8%, it raises its 2013-14 DPU forecasts by 1.5%-1.6%. Keeps an Outperform call; "Starhill still offers some value, which is rapidly becoming scarce in the S-REIT space." Notes the 2013-14 DPU yields of 6.0%-6.5% are above the sector's 5.8%-6.1%. The REIT is flat at $0.83.