Starhill Global REIT - OCBC Investment 2017-05-17: Divestment Of Asset In Tokyo, Japan

Starhill Global REIT - OCBC Investment 2017-05-17: Divestment Of Asset In Tokyo, Japan STARHILL GLOBAL REIT P40U.SI

Starhill Global REIT - Divestment Of Asset In Tokyo, Japan

  • Starhill Global REIT (SGREIT) recently announced that it has divested its entire beneficial interests in the Harajuku Secondo Property for a cash consideration of JPY410.2m, or approximately S$5.1m. 
  • This transaction comes in at an attractive premium of 22.4% to the property’s latest independent valuation of JPY335.0m, and translates into an exit yield of 2.5%, based on its FY16 NPI figure. 
  • The property is a 3-storey building for retail use which is located in the Harajuku district in Tokyo, Japan. It formed only 0.1% of SGREIT’s portfolio by asset value. 
  • SGREIT’s decision to divest does not come as a surprise to us, as management had been seeking opportunities to pare down its noncore assets. 
  • As a recap, SGREIT had divested the Roppongi Terzo property, also located in Tokyo, Japan, in Jan last year. 
  • Given the relatively small size of this divestment, we keep our BUY rating and S$0.82 fair value estimate on SGREIT.




Wong Teck Ching Andy CFA OCBC Investment | http://www.ocbcresearch.com/ 2017-05-17
OCBC Investment SGX Stock Analyst Report BUY Maintain BUY 0.820 Same 0.820



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