Recent Action - Starhill Global Reit

Just a quick update.

After my previous incident covering back my position onUMS, I have some cash that I can allocate my position to and decide to further increase my position in Starhill Reit by purchasing an additional 130,000 shares at a price of 71.5 cents.


My last purchase for Starhill was on the 7th Jan when the share price was still at 68 cents, and my average price before this purchase was at 70 cents, so this additional purchase was a case of averaging up.


My total position for Starhill has now increased to 377,000 shares.







This consideration comes on the back of their recently announced Q2FY19 results, which seems like quite a disappointment to many as DPU for the quarter dropped to 1.13 cents, as compared to 1.15 cents last quarter and 1.17 cents year on year.


In the overall scheme of things, it wasn't any of a big deal because those who pays attention to closely would have realized that things will not bottom out until this quarter where the retail occupancy is at one of its lowest, and that the committed occupancy for next quarter is going to get a lot better (and hence better DPU expected).


The office occupancy has increased to 93.6% this quarter from 89.4% last quarter while the office in Adelaide has also secured a higher occupancy.


This quarter results was largely impacted by their SG portfolio, which took up 62% of the overall, and in particular the retail side especially on Wisma, which had its occupancy down this quarter.



If we compare across year on year, we can understand why DPU is down because there was a few tenants that move out of Wisma in the quarter, hence occupancy was lower at 93.5% as compared to 95.9%.


The good news is that from next quarter onwards, Wisma has a committed occupancy of 97.6%, out of which new retail brands such as Love & Bravery, AW Lab, Mujosh Lab and the F&B by Paradise Dynasty is commencing in early this year.

The lease is likely to be rented out at the current base rate.



Together with the upcoming Master Lease Toshin review at Ngee Ann in mid 2019, I think we'll see a rebound back in their performance in the next 2 quarters.


At the current share price, Starhill is trading at a P/BV of around 0.8x and a dividend yield of about 6.3%.

Thanks for reading.


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65 comments
TiKongKia88

I must say, on hindsight, so far your UMS short position could not have been closed at a better timing. you must thank your broker house. HAHA

3Fs

Reply to @TiKongKia88 : Haha yes indeed on hindsight I saved a lot of money. But things like this are on hindsight la... Most things are easy to see on hindsight if you know what I mean.

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Sporeshare

66.5-67 cents is coming soon! Waiting to get when it turns up!

marmal8

Reply to @terrylim2 : yea i like both. i am adding to both. but personally i think starhill has more catalyst for price reversion than CRCT which is being depressed due to China uncertainty. dyodd

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minx99

They should rethink their strategy of investing only in malls in prime locations. By doing so, they restrict the available acquisition targets significantly as these malls are tightly held & sell only at prices that are non-accretive. Suburban malls which cater to necessity shopping can provide stability to income when the malls in prime areas are not doing so well during hard times....

VoucherHunter

Reply to @minx99 : Suburban malls not in line with their strategy.

terrylim2

Price gostan. Seeing stars with SGR. :x

terrylim2

Reply to @layers : I would give u a dislike. Keke.

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WK888

High chance for it to revisit the $0.60s after ex, what's the hurry?

layers

Reply to @WK888 : his investment strategy. he post abt it sometime ago.

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Bobbilipuli

Nevertheless I appreciate your courage of conviction in terms of a significant investment that you have committed to!!

minx99

Reply to @Bobbilipuli : Always stay cognizant that the bigger the position size, the higher the risks. It's vital that one bear this in mind when managing one's portfolio for the one in a million event...

Bobbilipuli

I will partially agree with you- that is increasing occupancy overall . However, the retail Rent reversion rates are going to be lower and this will eat in. The Aussie dollar fall and the subsequent impact needs factoring in as well. I hold but will monitor closely. The food and brewery guys will occupy but at lower rental rates. Will buy under 68

joerha

The DPU is dropping many years already. Have been holding this.

3Fs

Reply to @joerha : That's the reason I buy because the bottoming is in place.

Incognito

I read somewhere that there was an agreement between Starhill n Taka that the rental is fixed or limited revision. Has this been settled?

3Fs

Reply to @3Fs : Just to clarify, as a small investor, my role is not to hold the company long term on a forever mode. When there are uncertainties which the market does not appreciate, and there are small catalyst ahead, I buy them then I will get out when the bigger market wants to get in.

Usually, that works well for me.

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joerha

Reply to @minx99 : Why travel so far to Bangkok? Orchard nearer. But the local shops more or less same. Just go to heartland mall.

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Starhill Global Reit - Should See Better Days Ahead

SPH Reit's recent Q1FY19 results show something promising for the retail rent sector as they managed to negotiate for a 10.1% positive rental reversion for the renewed leases that expire in Q1FY19 for the Paragon properties.

The Orchard central area continues to bounce back strongly on the back of strong high occupancy and the low supply pipeline for the next upcoming 5 years.

This is the latest I have extracted from the URA website.




The office space is doing well from what we see on the price and rental index, but that only takes up 5% of the total NPI for Starhill, so that isn't very significant.


The biggest move would need to come from the Singapore retail from their Wisma Atria and Ngee Ann City properties, which takes up 50% of the total NPI.


If this moves, the share price will move accordingly, usually in the same correlation.


Thus, my turnaround play would have to depend on this one.



Starhill has a next Toshin rental review in Jun 2019, which I think will be the key for a positive rental reversion that follows that to SPH Reit.

I think we should see better days ahead for Starhill performance.

And I think at 6.6% yield currently, it is an opportunity for investors to keep accumulating.

*Vested and will continue to accumulate

Thanks for reading.


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"May 18" - SG Transactions & Portfolio Update"














No.

Counters

No. of Shares

Market Price (SGD)

Total Value (SGD) based on market price

Allocation %

1.

Vicom

27,000

6.05

163,350.00

25.0%

2.

M1

75,000

1.80

135,000.00

20.0%

3.

Fraser Logistic Trust

100,000

1.05

105,000.00

17.0%

4.

Far East Hospitality Trust

125,000

0.68

84,375.00

12.0%

5.

Ho Bee Land

30,000

2.55

76,500.00

12.0%

6.

Starhill Reit

100,000

0.70

70,000.00

11.0%

7.

Tuan Sing

40,000

0.42

17,000.00

3.0%

8.

Warchest

-

-

6,000.00

1.0%

Total

657,225.00

100%



We are just a month away from finishing the first half of this year.



This has been an incredibly fast year as we move month after month with a simple blink like that.



From the traveling front, we've also completed a family trip to Taiwanearlier this year in March and we just had a long weekend staycation at JB during the labor day holiday.



I will also have my another trip next week to Phuket hence the early updates again :)



On the same front, I have also finally reached the milestone of accumulating 300,000 krisflyer miles this month which we will be using for our longer trip in the future. It'll be enough for a return plane ticket for the 4 for us to LA.





Anyway, for this month updates, I have divested my Comfortdelgro and allocate them mostly to Vicom which I blogged overhere. Vicom went higher but Comfortdelgro went even much higher so I guess that's how life is treating me. Nevertheless, it's a decision that is made so life goes on from there :)



I have also added my position in Far East Hospitality Trust (FEHT) which I blogged overhere. I think hospitality is bottoming and based on the recent result I cover it appears that the thesis is running, so I am happy with the decision here.


The number of companies in my portfolio is getting smaller and smaller. They are shrinking to levels that I don't have to monitor them very often but it's a level I am comfortable with all of the holdings.



Net Worth Portfolio

The portfolio has increased from the previous month of $653,910 to $657,225 this month (+0.5% month on month; +9.5% year on year).

This is also the fourth time in the five months that the portfolio managed to once again break the all time record high.

A quick check on the return from the sgxcafe shows that this year return is at 2.9%, lagging the STI index. But I am not really worrying too much on this aspect.

Family's Portfolio

From last month onward, I have decided to also include the family's portfolio portion in order for easier reconciliation on the cdp statement.

1.) Wife's Portfolio

I have sold CDG at a higher price than my share at $2.19 and have allocated them to FLT.








No.


Counters


No. of Shares


Market Price (SGD)


Total Value (SGD) based on market price


Allocation %

1.

FLT

13,000

1.05

13,650.00

67.0%

2.

Sasseur Reit

8,000

0.79

6,320.00

33.0%

Total SGD

19,970.00

100.00%



2.) Baby B1.0 Portfolio (Age: 4 years and 1 month)








No.


Counters


No. of Shares


Market Price (SGD)


Total Value (SGD) based on market price


Allocation %

1.

FLT

13,000

1.05

13,650.00

67.0%

2.

Singtel

700

3.50

2,450.00

33.0%

Total SGD

16,100.00

100.00%



3.) Baby B2.0 Portfolio (Age: 1 years and 4 month)

I added a bit of funds into buying more FLT share for this month.








No.


Counters


No. of Shares


Market Price (SGD)


Total Value (SGD) based on market price


Allocation %

1.

FLT

3,000

1.05

3,150.00

48.0%

2.

Singtel

1,000

3.50

3,500.00

52.0%

Total SGD

6,650.00

100.00%



4.) Mum's Portfolio







No.


Counters


No. of Shares


Market Price (SGD)


Total Value (SGD) based on market price


Allocation %

1.

FLT

6,000

1.05

6,300.00

100.0%

Total SGD

6,300.00

100.00%



Final Thoughts

Most of the companies will be paying out dividends so it'll be raining cashflow this month and it's the best time to save up in time for rainy days.



I'll be using most of the proceeds for the FLT rights which will be the main focus this month. I will write more on that once it is more conclusive.


Thanks for reading.



If you like our articles, you may follow ourFacebook Pagehere.




$VICOM(V01.SI) $M1(B2F.SI) $Ho Bee Land(H13.SI) $StarhillGbl Reit(P40U.SI) $Tuan Sing(T24.SI) $Frasers L&I Tr(BUOU.SI)

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