Starhill Global ( former McQ Prime )

[tonylim]

MALAYSIA INSIGHT
Is the property market overheating?
Developers' belief that prices will keep escalating due to rising raw material costs and land scarcity only adds to anxiety


By PAULINE NG
KL CORRESPONDENT


KUALA Lumpur real estate appears to have notched a new benchmark. That a 29,127-square-foot vacant land was sold recently for RM210 million (S$90.4 million) or some RM7,210 per square foot (psf) has had property players stumped.


Privately held Urusharta Cemerlang (KL) paid out more than double the previous record registered in 2008 of RM2,588 psf for another piece of real estate in the city.

To some, it is an indication of property magnate Kwek Leng Beng's ability to obtain the price desired. The vendor, CDL Hotels (Malaysia), is a wholly owned subsidiary of Millennium & Copthorne Hotels plc, which is in turn controlled by City Developments Ltd.

Local property tycoon Lim Siew Choon and the Qatar Investment Authority are the controlling shareholders of Urusharta Cemerlang, which also owns the popular Pavilion Kuala Lumpur which is sited next to the newly acquired vacant land on Jalan Bukit Bintang. The nearby newly renovated Fahrenheit 88 is also another shopping mall where it has interests.

That the land has now been acquired at such a premium raises questions as to what its new owners intend to do with it.

Jalan Bukit Bintang forms part of Kuala Lumpur's main shopping avenue and the YTL Group is the other retail and hospitality biggie with its cluster of hotels and shopping centres along the road. Under the government's proposed Greater KL initiative, the area is to be transformed into Malaysia's equivalent of Singapore's Orchard Road.

If developed along the lines of Pavilion KL, it could emerge as a mixed development with a retail, residential and hotel offering. Under an initial plan by CDL Hotels, which owns the nearby Grand Millennium Hotel, super-luxury apartments were to be built. It had even come up with an iconic design for the building as well as registered expressions of interest but thought better of it after the global financial crisis struck.

The whopping land deal, however, has raised questions as to whether the property market is overheating. It also comes at a time when more Malaysians are questioning the affordability of housing, many already of the opinion that properties are priced out of the average Joe's reach.

That developers believe prices will continue to escalate because of rising raw material costs and the scarcity of land - especially in the two most popular residential hubs, the Klang Valley and Penang - only adds to the anxiety.

But as many have pointed out, the bulk of the price appreciation of 10 per cent to 30 per cent since the beginning of the year has been in landed properties - terrace homes, semi-detached houses and bungalows - in the more popular areas owing to the limited stock and future supply.

Land is of course much cheaper further away from the centre of activities, the lack of good public transport making these housing schemes unattractive to many. But the outer-lying areas are also where many developers opt to fulfil their social obligations - as required by the authorities - to build low-cost homes. Consequently, although the bulk of homes built in the country are in the low to middle-cost segment (mainly costing between RM25,000 and RM250,000), this segment also has the biggest overhang in supplies despite being more affordable.

It is of little surprise then that property bosses have honed in on certain locations and types of products which they have discovered are 'more resilient in terms of demand, capital appreciation and value preservation'.

These invariably tend to be niche products that offer higher-quality finishing, design and security - in other words, high-end residences.

Malaysian developers maintain their take-home profit is an average 15 per cent despite lower land costs of some 15 per cent of the overall costs. Construction costs, which include their social obligation to build homes for the poorer segments of the community, mandatory discounts for bumiputra buyers and the undertaking of some public infrastructure works in certain instances eat up 70 per cent of the bill. By their reckoning, their Singaporean counterparts derive more in profit - 20 per cent - because land and construction costs account for 40 per cent respectively of overall costs.

Talk of market-tightening measures, including capping loan amounts to cool the market, are counter-productive, they maintain, preferring the government review its delivery channels to reduce administrative charges as well as the social obligations.

While property seekers will be relieved to hear that property players do not believe the latest land deal to be representative of the market - Urusharta's hefty premium is perceived as its way of ensuring the land next to its Pavilion KL was in the bag - land prices in the city centre are expected to gravitate towards the RM3,000 psf mark in the not too distant future.

[winston]

Starhill Global REIT, a Singapore-based property trust that owns malls across the region, said on Tuesday it has refinanced S$447 million ($336.1 million) of secured debt maturing this month.

Source: Reuters

[winston]

Not vested. What does this mean ?

BRIEF-Moody's withdraws Starhill Global REIT ratings

Oct 13 (Reuters) - Starhill: Moody's Investors Service has withdrawn its Baa2 Corporate Family Rating for Starhill Global REIT ("Starhill") and the (P)Baa3 senior unsecured rating for the MTN Programme issued under MMP MTN Pte and guaranteed by Starhill.

Source: Reuters

[tonylim]

They don't know how to rate ?

[Stockinvestor]

Run out of budget , must cut cost.

[tonylim]

Strong buying interest today, anticipating good DPU ?

[winston]

Not vested

YTL Starhill Global's Q3 DPU inch 5.3% up to 1 ct
By ANGELA TAN

YTL Starhill Global reported on Tuesday that its distribution per unit (DPU) for the period 1 July 2010 to 30 September 2010 was 1.00 cent, 5.3 per cent higher compared to the 0.95 cents a year ago.

On an annualised basis, the latest distribution represents a yield of 6.84 per cent.

YTL Starhill Global said its 3Q 2010 revenue was S$45.2 million, 38.7 per cent higher than that achieved a year ago.

Net property income was higher at S$35.8 million, representing an increase of 37 per cent over 3Q 2009, mainly attributed to contribution from the recently acquired Starhill Gallery and Lot 10 in Malaysia, and David Jones Building in Australia.

Income to be distributed to Unitholders in 3Q 2010 was S$19.4 million, 5.8 per cent higher than that of S$18.4 million in 3Q 2009.

http://www.businesstimes.com.sg/sub/lat ... 94,00.html?

[tonylim]

Starhill Global REIT: BUY; S$0.61; Bloomberg Code: SGREIT SP
Stable performer
Price Target : S$ 0.76 (Prev S$ 0.73)

by: Derek TAN CPA+65 6398 7966

At a Glance
• DPU of 1.0 Scts in line
• Recovering office occupancy at Wisma Atria positive sign
• BUY, TP revised to S$0.76 offers 31% total return

Comment on Results

DPU of 1.0 Scts in line. Starhill Global REIT (SGREIT) reported a strong growth in topline and net property income to S$45.2m (+38.7% yoy, 22% qoq) and S$35.8m (37% yoy, 24%qoq), boosted by an expanded portfolio - from recently completed acquisitions:
(i) David Jones in Australia and
(ii) Lot 10 and Starhill Gallery in Malaysia.

NPI was also slightly eroded from higher A&P, leasing commissions expensed by SGREIT. Distributable income to unitholders of S$19.4 (net of S$2.5m to CPU holders) translates to a DPU of 1.0 Scts.

Wisma Atria office occupancy levels rebounds - positive sign. While its retail portfolio continue to remain stable, SGREIT’s office revenues continue to remain weak at S$5.7m (-5%yoy, -4% qoq). However, we notice a pick-up in occupancy levels to 85.7% as of Sept 2010 (vs 81.4% in 2Q10) at Wisma Atria as positive sign and we understand that the manager is in negotiations with a couple more prospective tenants to take up further space, which should filter through to earnings in the coming quarter.

The expected improved office leasing environment (projecting office occupancy to head up to 95% in FY11) should somewhat offset the projected negative rental renewals come 2011, mitigating downside earnings risk from its office portfolio in the coming quarters.


Recommendation

Valuations attractive, BUY, TP S$0.76. Trading at 0.7x P/BV, and offering forward FY11-12 yields of c7.3%, we see relative value in SGREIT compared to other SREIT peers who trade at 1.05x P/BV, and offer a weighted average yield of 6.0%. Our TP is raised to S$0.76 as we roll forward our valuation to FY11.

(Document link: Singapore Research)

[winston]

Not vested. From DBS:-

Recommendation

Valuations attractive, BUY, TP S$0.76.

Trading at 0.7x P/BV, and offering forward FY11-12 yields of c7.3%, we see relative value in SGREIT compared to other SREIT peers who trade at 1.05x P/BV, and offer a weighted average yield of 6.0%.

Our TP is raised to S$0.76 as we roll forward our valuation to FY11.

http://www.remisiers.org/cms_images/res ... lt_buy.pdf

[tonylim]

One of the ID, Kieth Tay bought 800,000 shares today at 0.615.
Just wonder why he has been a director in this company for years , he should know many which we don't know, and he didn't want to buy it when the share price was way below this level ?