Starhill Global REIT

Starhill Global REIT: has secured a 10.0% increase in base rent for Toshin master lease at Ngee Ann City, following the completion of the rent review process yday. The new rate was based on the avg of 3 market rental valuations undertaken by independent licensed valuers, and will be retrospectively applied for the term commencing 8 Jun 2011. Assuming the accumulated rental arrears owing as a result of the rental increase from 8 Jun 2011 to 31 Dec 2012 were paid in FY12 (after deducting expenses), mgt estimates an increase of 0.19 cents (+4.3%) in its FY12 DPU. SGREIT intends to distribute substantially the net arrears received (~$3.8m) from Toshin in 1Q13. This will be on top of the regular distributable income generated for the quarter. OCBC expects the market to react favourably to this news. Maintains Buy, places TP $0.95 under review, pending incorporation of the rental and DPU increase in its forecasts. The stock is +0.6% at $0.87.