Research from SooChow CSSD Capital Markets (Asia), SCCM Asia Research

SCCM Asia Research

Research from SooChow CSSD Capital Markets (Asia)

Headquartered in Singapore, SooChow CSSD Capital Markets (Asia) is an investment bank focusing on emerging growth companies across Asia, providing a full suite of investment banking services, including corporate finance, mergers and acquisitions advisory, equity capital markets, institutional equities sales and trading and equities research.

SooChow CSSD Capital Markets (Asia)

Thematic (Sector/Industry)

<ul><li>Government introduces fresh property cooling measures; Toughest measures yet</li><li>New private home sales rose 69.8% MoM in Nov21; Take-up rate saw slight decrease for the past 11mo</li><li><a href="https://www.smartkarma.com/entities/starhill-global-reit" target="_blank" data-smartkarma-citation="entities:10791" rel="noopener">Starhill Global REIT (SGREIT SP)</a> seeks out strata area of Wisma Atria owned by Isetan (ISET SP)</li></ul>

Government introduces fresh property cooling measures; Toughest measures yetNew private home sales rose 69.8% MoM in Nov21; Take-up rate saw slight decrease for the past 11moStarhill Global REIT (SGREIT SP) seeks out strata area of Wisma Atria owned by Isetan (ISET SP)

ASEAN Builder's Scoop (16Dec21) - Property Cooling Measures Toughest One Yet

<h2>Singapore</h2><h3>SREITs results in a glance (see detailed spreadsheet and calendar attached)</h3><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/238/456/original/image_76502934321635528996334.png?1635528999" class="editor-image img-responsive" data-smartkarma-image-id="238456"></figure><h3><a href="https://www.smartkarma.com/entities/starhill-global-reit" target="_blank" data-smartkarma-citation="entities:10791" rel="noopener">Starhill Global REIT (SGREIT SP)</a> 1Q22 Business Updates; Little help from VTL leading up to festive season</h3><ul><li>1Q22 revenue and NPI rose by +4.0% and +15.1% YoY, respectively, to S$44.8m (22.8% of BB est.) and S$34.3m (25.3% of BB est.), respectively, mainly due to lower rental assistance and lower operating expenses, which was partially offset by lower contributions from Wisma Atria (Revenue: -8.9%, NPI: -8% YoY). No DI nor DPU was disclosed</li></ul><div style="display: none;"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/238/455/original/blobid0.png?1635528963" class="editor-image img-responsive" data-smartkarma-image-id="238455"></figure></div>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached)Starhill Global REIT (SGREIT SP) 1Q22 Business Updates; Little help from VTL leading up to festive season1Q22 revenue and NPI rose by +4.0% and +15.1% YoY, respectively, to S$44.8m (22.8% of BB est.) and S$34.3m (25.3% of BB est.), respectively, mainly due to lower rental assistance and lower operating expenses, which was partially offset by lower contributions from Wisma Atria (Revenue: -8.9%, NPI: -8% YoY). No DI nor DPU was disclosed

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/starhill-global-reit" target="_blank" data-smartkarma-citation="entities:10791" rel="noopener">Starhill Global REIT (SGREIT SP)</a> prices S$125m 2.23% notes due 2028</h3>SGREIT has priced S$125m notes with a fixed interest rate of 2.23% per annum due 2028, to be issued under its S$2bn multi-currency debt issuance programme. The interest for the Series 003 notes will be payable semi-annually in arrear, and have a tenor of seven years. The notes may be redeemed at the option of the issuer in whole or in part on any interest payment date prior to the maturity date on 13Sep28 at the make-whole amount together with interest accrued. The net proceeds from the notes will be used to refinance existing borrowings, meet capital expenditure requirements, or for working capital purposes.

SingaporeStarhill Global REIT (SGREIT SP) prices S$125m 2.23% notes due 2028SGREIT has priced S$125m notes with a fixed interest rate of 2.23% per annum due 2028, to be issued under its S$2bn multi-currency debt issuance programme. The interest for the Series 003 notes will be payable semi-annually in arrear, and have a tenor of seven years. The notes may be redeemed at the option of the issuer in whole or in part on any interest payment date prior to the maturity date on 13Sep28 at the make-whole amount together with interest accrued. The net proceeds from the notes will be used to refinance existing borrowings, meet capital expenditure requirements, or for working capital purposes.

<h2>Singapore</h2>
<h3>
<a href="https://www.smartkarma.com/entities/starhill-global-reit" target="_blank" data-smartkarma-citation="entities:10791" rel="noopener">Starhill Global REIT (SGREIT SP)</a> – Starting FY22E on a high note (BUY; TP S$0.71/Unit)</h3>
2H21 Revenue/NPI have recovered to 90%/88% of 2H19’s. Recent resurgence of Covid-19 cases could weigh against rental reversions and demand further rental assistance. However, SGREIT’s resilient occupancy and master lease structure should offer DPU support. Reiterate BUY with higher TP $0.71/unit, as we rollover our valuations to FY22E. Faster than expected reopening of SG economy and tourism revival would be potential re-rating catalyst in FY22E.
<ul>
<li>Positive surprise with rental rebates reversals and lower expenses. 2H21 revenue and NPI increased 10.5% and 20.2% YoY to S$92.9m and S$69.8m, respectively, mainly due to lower rental assistance and stronger AUD. FY21 revenue and NPI grew 0.3% and 2.0% YoY to S$181.3m and S$134.7m, respectively. S$3.2m of rental rebates reversals from Ngee Ann City and AUS assets were offset by higher rental rebates given to Wisma Atria tenants in 2H21. Overall, rental assistance amounted to c.S$9.6m in FY21 (vs. S$17m in FY20). Combined with adjustment to reflect timing difference of property tax refunds in SG, the absence of S$3.7m one-off capital allowance claim in 2H20, and release of S$4.6m deferred FY20 DI, 2H21 DPU was 195.7% higher at S$2.07c, bringing FY21 DPU 33.4% YoY higher to S$3.95c. The S$7.7m retained FY20 DI has been fully been released with S$0.14c in 1H21 and S$0.21c in 2H21. Excluding the deferred FY20 DI, DPU increased 77.1% and 8.8% YoY in 2H21 and FY21, respectively. FY21 revenue, NPI and DPU exceeded our full-year forecasts by 3.7%, 5.4%, and 12.1%, respectively</li>
<li>Sales has yet to recover to pre-Covid level but occupancies offer silver linings. Pressure at WA (Retail) persists with lower occupancy, lower rent and higher OpEx in 2H21. FY21 rent reversion for Retail came in at -11% vs. Office at -6%. Nonetheless, we take comfort in the resilient portfolio occupancy at 96.7% and committed SG Retail occupancy at 99.3%, supported by new tenant demand. With 15.1% of GRI is due for expiry in FY22E (of which, 11.6% are Retail leases and 3.6% are Office leases), mgmt. expects rent reversion, particularly for Retail’s, to be slight negative, alongside further rental rebates and lease restructuring in view of the renewed movement restrictions in SG and AUS</li>
<li>Reiterate BUY with higher TP of S$0.71/unit, as we roll over our valuations to FY22E. 36.1% gearing level would provide SGREIT financial flexibility in executing its long[1]term strategy to diversify into assets that generate stable cash flows and offers attractive yields. Mgmt. targets to acquire offi ce properties in key gateway cities in SG, AUS and JP, thus bringing revenue mix of Retail vs. Office to 50:50 (currently at 86:14) over the next 3-5 years. Potential launches of travel bubble, further easing of safe distancing measures, and greater proportion of workers returning to office should expedite SGREIT’s recovery in FY22E.</li>
</ul>

Singapore

Starhill Global REIT (SGREIT SP) – Starting FY22E on a high note (BUY; TP S$0.71/Unit)
2H21 Revenue/NPI have recovered to 90%/88% of 2H19’s. Recent resurgence of Covid-19 cases could weigh against rental reversions and demand further rental assistance. However, SGREIT’s resilient occupancy and master lease structure should offer DPU support. Reiterate BUY with higher TP $0.71/unit, as we rollover our valuations to FY22E. Faster than expected reopening of SG economy and tourism revival would be potential re-rating catalyst in FY22E.

Positive surprise with rental rebates reversals and lower expenses. 2H21 revenue and NPI increased 10.5% and 20.2% YoY to S$92.9m and S$69.8m, respectively, mainly due to lower rental assistance and stronger AUD. FY21 revenue and NPI grew 0.3% and 2.0% YoY to S$181.3m and S$134.7m, respectively. S$3.2m of rental rebates reversals from Ngee Ann City and AUS assets were offset by higher rental rebates given to Wisma Atria tenants in 2H21. Overall, rental assistance amounted to c.S$9.6m in FY21 (vs. S$17m in FY20). Combined with adjustment to reflect timing difference of property tax refunds in SG, the absence of S$3.7m one-off capital allowance claim in 2H20, and release of S$4.6m deferred FY20 DI, 2H21 DPU was 195.7% higher at S$2.07c, bringing FY21 DPU 33.4% YoY higher to S$3.95c. The S$7.7m retained FY20 DI has been fully been released with S$0.14c in 1H21 and S$0.21c in 2H21. Excluding the deferred FY20 DI, DPU increased 77.1% and 8.8% YoY in 2H21 and FY21, respectively. FY21 revenue, NPI and DPU exceeded our full-year forecasts by 3.7%, 5.4%, and 12.1%, respectively
Sales has yet to recover to pre-Covid level but occupancies offer silver linings. Pressure at WA (Retail) persists with lower occupancy, lower rent and higher OpEx in 2H21. FY21 rent reversion for Retail came in at -11% vs. Office at -6%. Nonetheless, we take comfort in the resilient portfolio occupancy at 96.7% and committed SG Retail occupancy at 99.3%, supported by new tenant demand. With 15.1% of GRI is due for expiry in FY22E (of which, 11.6% are Retail leases and 3.6% are Office leases), mgmt. expects rent reversion, particularly for Retail’s, to be slight negative, alongside further rental rebates and lease restructuring in view of the renewed movement restrictions in SG and AUS
Reiterate BUY with higher TP of S$0.71/unit, as we roll over our valuations to FY22E. 36.1% gearing level would provide SGREIT financial flexibility in executing its long[1]term strategy to diversify into assets that generate stable cash flows and offers attractive yields. Mgmt. targets to acquire offi ce properties in key gateway cities in SG, AUS and JP, thus bringing revenue mix of Retail vs. Office to 50:50 (currently at 86:14) over the next 3-5 years. Potential launches of travel bubble, further easing of safe distancing measures, and greater proportion of workers returning to office should expedite SGREIT’s recovery in FY22E.


ASEAN Builder's Scoop (06Aug21) - SGREIT Starting FY22E on a High Note

<h2>Singapore</h2>
<h3>SREITs results in a glance (see detailed spreadsheet and calendar attached)</h3>
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 98.1pt;">
 
</td>
<td style="width: 98.1pt;">
SGREIT
</td>
<td style="width: 98.1pt;">
CDREIT
</td>
<td style="width: 98.1pt;">
FEHT
</td>
<td style="width: 98.1pt;">
OUECT
</td>
<td style="width: 98.1pt;">
FIRT
</td>
<td style="width: 98.15pt;">
FHT
</td>
</tr>
<tr>
<td style="width: 98.1pt;">
Period
</td>
<td style="width: 98.1pt;">
2H21
</td>
<td style="width: 98.1pt;">
1H21
</td>
<td style="width: 98.1pt;">
1H21
</td>
<td style="width: 98.1pt;">
1H21
</td>
<td style="width: 98.1pt;">
1H21
</td>
<td style="width: 98.15pt;">
9M21
</td>
</tr>
<tr>
<td style="width: 98.1pt;">
Gross Revenue (S$ m)
</td>
<td style="width: 98.1pt;">
92.9 (10.5% YoY)
</td>
<td style="width: 98.1pt;">
66.2 (27.2% YoY)
</td>
<td style="width: 98.1pt;">
41.6 (-6.1% YoY)
</td>
<td style="width: 98.1pt;">
133.5 (-6% YoY)
</td>
<td style="width: 98.1pt;">
38.9 (+0.9% YoY)
</td>
<td style="width: 98.15pt;">
NA
</td>
</tr>
<tr>
<td style="width: 98.1pt;">
NPI (S$ m)
</td>
<td style="width: 98.1pt;">
69.8 (20.2% YoY)
</td>
<td style="width: 98.1pt;">
37.0 (24.4% YoY)
</td>
<td style="width: 98.1pt;">
36.2 (-6.2% YoY)
</td>
<td style="width: 98.1pt;">
109 (-3.1% YoY)
</td>
<td style="width: 98.1pt;">
37.6 (+0.2% YoY)
</td>
<td style="width: 98.15pt;">
NA
</td>
</tr>
<tr>
<td style="width: 98.1pt;">
DPU (S$ c)
</td>
<td style="width: 98.1pt;">
2.07 (195.7% YoY)
</td>
<td style="width: 98.1pt;">
1.22 (-19.2% YoY)
</td>
<td style="width: 98.1pt;">
1.1 (+6.8% YoY)
</td>
<td style="width: 98.1pt;">
1.23 (+23% YoY)
</td>
<td style="width: 98.1pt;">
1.3 (-43.5% YoY)
</td>
<td style="width: 98.15pt;">
NA
</td>
</tr>
<tr>
<td style="width: 98.1pt;">
NAV per Unit (S$)
</td>
<td style="width: 98.1pt;">
0.81
</td>
<td style="width: 98.1pt;">
1.29
</td>
<td style="width: 98.1pt;">
0.7912
</td>
<td style="width: 98.1pt;">
0.58
</td>
<td style="width: 98.1pt;">
0.3512
</td>
<td style="width: 98.15pt;">
1H21: 0.66
</td>
</tr>
<tr>
<td style="width: 98.1pt;">
P/B (x)
</td>
<td style="width: 98.1pt;">
0.75
</td>
<td style="width: 98.1pt;">
0.95
</td>
<td style="width: 98.1pt;">
0.73
</td>
<td style="width: 98.1pt;">
1.34
</td>
<td style="width: 98.1pt;">
0.75
</td>
<td style="width: 98.15pt;">
0.79
</td>
</tr>
<tr>
<td style="width: 98.1pt;">
Occupancy (%)
</td>
<td style="width: 98.1pt;">
96.7
</td>
<td style="width: 98.1pt;">
5 SG Hotels excl. W Hotel and NCQ: 73.5
6 SG Hotels excl. W Hotel: 70.2
</td>
<td style="width: 98.1pt;">
Hotels : 77.6
Service Residence : 76.2
</td>
<td style="width: 98.1pt;">
91.7 (Commercial)
92.3 (SG Office)
89.6 (Mandarin  Gallery)
</td>
<td style="width: 98.1pt;">
Not Disclosed
</td>
<td style="width: 98.15pt;">
SG: 59.8
AUS: 44.3
UK: 18.8
JP: 31.3
MY: 7.7
</td>
</tr>
<tr>
<td style="width: 98.1pt;">
Reversion (%)
</td>
<td style="width: 98.1pt;">
Not disclosed
</td>
<td style="width: 98.1pt;">
RevPAR (% YoY):
SG: -19.5 (or -9.5 incl. W Hotel)
Maldives: +139.2
NZ: -31.8
Germany: +61.2
Italy: -84.4
JP: -27.9
UK: -21.8
</td>
<td style="width: 98.1pt;">
RevPAR (% YoY):
Hotels: -35.4
Service Residence: -16.9 YoY
</td>
<td style="width: 98.1pt;">
2Q21 Office reversions: -5.7 to +2.2
</td>
<td style="width: 98.1pt;">
Not Disclosed
</td>
<td style="width: 98.15pt;">
RevPAR (% YoY):
SG: -31.4
AUS: -52.3
UK: -68.9
JP: -40.8
MY: -87.7
</td>
</tr>
<tr>
<td style="width: 98.1pt;">
Gearing (%)
</td>
<td style="width: 98.1pt;">
36.1
</td>
<td style="width: 98.1pt;">
39.1
</td>
<td style="width: 98.1pt;">
41.3
</td>
<td style="width: 98.1pt;">
38
</td>
<td style="width: 98.1pt;">
34.7
</td>
<td style="width: 98.15pt;">
42.1
</td>
</tr>
<tr>
<td style="width: 98.1pt;">
Cost of Debt (%)
</td>
<td style="width: 98.1pt;">
3.28
</td>
<td style="width: 98.1pt;">
1.9
</td>
<td style="width: 98.1pt;">
2.1
</td>
<td style="width: 98.1pt;">
3.2
</td>
<td style="width: 98.1pt;">
Not Disclosed
</td>
<td style="width: 98.15pt;">
2.0
</td>
</tr>
<tr>
<td style="width: 98.1pt;">
1 Yr Fwd Yield (%)
</td>
<td style="width: 98.1pt;">
6.9
</td>
<td style="width: 98.1pt;">
4.4
</td>
<td style="width: 98.1pt;">
4.7
</td>
<td style="width: 98.1pt;">
7.4
</td>
<td style="width: 98.1pt;">
9.8 (annualized 1H21)
</td>
<td style="width: 98.15pt;">
3.1
</td>
</tr>
<tr>
<td style="width: 98.1pt;">
Debt Hedged (%)
</td>
<td style="width: 98.1pt;">
91
</td>
<td style="width: 98.1pt;">
63.3
</td>
<td style="width: 98.1pt;">
68.2
</td>
<td style="width: 98.1pt;">
82.2
</td>
<td style="width: 98.1pt;">
Not Disclosed
</td>
<td style="width: 98.15pt;">
77
</td>
</tr>
<tr>
<td style="width: 98.1pt;">
Target Price
</td>
<td style="width: 98.1pt;">
Under Review
</td>
<td style="width: 98.1pt;">
N/A
</td>
<td style="width: 98.1pt;">
N/A
</td>
<td style="width: 98.1pt;">
N/A
</td>
<td style="width: 98.1pt;">
N/A
</td>
<td style="width: 98.15pt;">
N/A
</td>
</tr>
<tr>
<td style="width: 98.1pt;">
Rating
</td>
<td style="width: 98.1pt;">
Under Review
</td>
<td style="width: 98.1pt;">
N/A
</td>
<td style="width: 98.1pt;">
N/A
</td>
<td style="width: 98.1pt;">
N/A
</td>
<td style="width: 98.1pt;">
N/A
</td>
<td style="width: 98.15pt;">
N/A
</td>
</tr>
</tbody>
</table>

Singapore
SREITs results in a glance (see detailed spreadsheet and calendar attached)




 


SGREIT


CDREIT


FEHT


OUECT


FIRT


FHT




Period


2H21


1H21


1H21


1H21


1H21


9M21




Gross Revenue (S$ m)


92.9 (10.5% YoY)


66.2 (27.2% YoY)


41.6 (-6.1% YoY)


133.5 (-6% YoY)


38.9 (+0.9% YoY)


NA




NPI (S$ m)


69.8 (20.2% YoY)


37.0 (24.4% YoY)


36.2 (-6.2% YoY)


109 (-3.1% YoY)


37.6 (+0.2% YoY)


NA




DPU (S$ c)


2.07 (195.7% YoY)


1.22 (-19.2% YoY)


1.1 (+6.8% YoY)


1.23 (+23% YoY)


1.3 (-43.5% YoY)


NA




NAV per Unit (S$)


0.81


1.29


0.7912


0.58


0.3512


1H21: 0.66




P/B (x)


0.75


0.95


0.73


1.34


0.75


0.79




Occupancy (%)


96.7


5 SG Hotels excl. W Hotel and NCQ: 73.5
6 SG Hotels excl. W Hotel: 70.2


Hotels : 77.6
Service Residence : 76.2


91.7 (Commercial)
92.3 (SG Office)
89.6 (Mandarin  Gallery)


Not Disclosed


SG: 59.8
AUS: 44.3
UK: 18.8
JP: 31.3
MY: 7.7




Reversion (%)


Not disclosed


RevPAR (% YoY):
SG: -19.5 (or -9.5 incl. W Hotel)
Maldives: +139.2
NZ: -31.8
Germany: +61.2
Italy: -84.4
JP: -27.9
UK: -21.8


RevPAR (% YoY):
Hotels: -35.4
Service Residence: -16.9 YoY


2Q21 Office reversions: -5.7 to +2.2


Not Disclosed


RevPAR (% YoY):
SG: -31.4
AUS: -52.3
UK: -68.9
JP: -40.8
MY: -87.7




Gearing (%)


36.1


39.1


41.3


38


34.7


42.1




Cost of Debt (%)


3.28


1.9


2.1


3.2


Not Disclosed


2.0




1 Yr Fwd Yield (%)


6.9


4.4


4.7


7.4


9.8 (annualized 1H21)


3.1




Debt Hedged (%)


91


63.3


68.2


82.2


Not Disclosed


77




Target Price


Under Review


N/A


N/A


N/A


N/A


N/A




Rating


Under Review


N/A


N/A


N/A


N/A


N/A





ASEAN Builder's Scoop (30Jul21) - SGREIT Solid Set of Results

Singapore

Starhill Global REIT is a Singapore-based real estate investment trust that invests in a portfolio of retail and office properties. It owns nine mid- to high-end assets across Singapore, Australia, Malaysia, Japan, and China, generating revenue primarily from leasing. The company was established in 2005 and is headquartered in Singapore.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Starhill Global REIT (SGREIT SP)

ASEAN Builder's Scoop (16Dec21) - Property Cooling Measures Toughest One Yet

Property cooling measures toughest one yet; New private home sales rise 69.8% MoM in Nov21; SGREIT interested in ISET's WA space; PRMX sells 2ha...

SCCM Asia Research

ASEAN Builder's Scoop (29Oct21)

SGREIT little help from VTL; CDREIT QoQ improvements across the board; FEHT stabilizing QoQ hotel metrics; FHT signals worst is over; MAGIC weak...

SCCM Asia Research

ASEAN Builder's Scoop (7Sep21)

SGREIT prices new 2028 note at 2.23%; Peace Centre/Mansion put on en-bloc; MY 1Q21 resi transactions fell 45% YoY; SMPH plans PHP10bn bond sale;...

SCCM Asia Research

ASEAN Builder's Scoop (06Aug21) - SGREIT Starting FY22E on a High Note

SGREIT starting FY22E on a high note; Rising online sales trend continues; Mapletree issues fixed-for-life perps at 3.7%; Low base boosts RLC's...

SCCM Asia Research

ASEAN Builder's Scoop (30Jul21) - SGREIT Solid Set of Results

SGREIT solid set of results; CDREIT not out of woods yet; FEHT weak operations continued; OUECT slowing reversions offset by hotel rebound; FIRT...

SCCM Asia Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)