Starhill Global REIT: 5QFY15 DPU increased 1.6% y/y (against 1Q15) to 1.26¢, while distributable income rose 1.8% to $28.4m.
Revenue dipped 2.7% to $47.9m, mainly due to underperformance at the Chengdu mall and RM/A$/yen depreciation, although Wisma Atria and Ngee Ann City met expectations. NPI was shaved 0.6% to $38.8m, on a 10.9% y/y drop in property expenses, from tight cost control and lower property taxes in Malaysia.
Management attributed Chengdu mall’s underperformance to ongoing austerity measures, coupled with new competition. Meanwhile, Maybank-KE likes Wisma Atria’s rental reversions of 13.3%, underscoring a backdrop of a 2% dip in shopper traffic, and 9% fall in tenant sales.
Occupancy stood at 99.1% with WALE by NLA of 5.5 years.
Aggregate leverage will rise to 35.3% upon completion of the acquisition of Myer Centre Adelaide, from 28.6% in Dec.
Growth will likely come from the Myer Centre acquisition, as well as rent reviews for Ngee Ann City and Malaysian properties in 2016. Meanwhile, Maybank-KE will keep tabs on Chengdu and Singapore tourist numbers.
Starhill Global is currently trading at 5.9% annualized 5QFY15 yield, and 0.9x P/B.
Maybank-KE maintains Buy with TP of $0.93.
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