Market Pulse: Starhill Global REIT
Starhill Global REIT: Visit to Down Under
We visited Starhill Global REIT’s (SGREIT) recently acquired Myer Centre Adelaide (MCA) property in Adelaide last week. The purchase price was A$288m (~S$302.4m). MCA has a net lettable area of 602,000 sq ft and is well-located in the Rundle Mall precinct in the Adelaide CBD area. The mall started bustling with crowds during the lunchtime period. We believe there is ample potential for rental income to be increased in the future, as management intends to carry out a tenant repositioning exercise, while there is also ~114,000 sq ft NLA of vacant space on levels 4 and 5 which has not been utilised. Looking ahead, we are positive on Adelaide’s retail market, and believe there is room for further cap rate compression. The retail sales outlook appears buoyant, while another growth driver may come from the expansion of international retailers into Adelaide. Reiterate
BUY and
S$0.93 fair value estimate on SGREIT. (Wong Teck Ching Andy)
Source: http://www.ocbcresearch.com/
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