Starhill Global REIT - OCBC Investment Research 2016-01-08: Divestment of Japan asset

Starhill Global REIT - OCBC Investment Research 2016-01-08: Divestment of Japan asset STARHILL GLOBAL REIT P40.SI 

Starhill Global REIT: Divestment of Japan asset 

  • Starhill Global REIT (SGREIT) announced that it has divested its Roppongi Terzo property which is located in Tokyo, Japan. 
  • The divestment value is JPY2.5b (~S$29.9m), which is 2.5% higher than its latest valuation of JPY2.44b. 
  • The divestment price translates into a yield of 4.4%, which we believe is a good exit level. 
  • This is SGREIT’s third divestment in Japan over the past three years and reflects its strategy to streamline its overall portfolio. 
  • The net proceeds would be used to repay its JPY loans and/or for working capital purposes. This would lower SGREIT’s gearing slightly from 35.7% to 35.1%. 
  • As Roppongi Terzo contributed only 0.9% of SGREIT’s FY14/15 gross revenue, we see this transaction as immaterial in nature. Hence, we maintain our forecasts, BUY rating and S$0.93 fair value on the stock. 





Wong Teck Ching Andy CFA OCBC Securities | http://www.ocbcresearch.com/ 2016-01-08
OCBC Securities SGX Stock Analyst Report BUY Maintain BUY 0.93 Same 0.93


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