Starhill Global ( former McQ Prime )

[qxing78]

I am concerned about the new supply of retail space along Orchard road.
ION Orchard and Orchard Central are coming up
Meritus Mandarin and Paragon are having 'makeover'.
Also, Wheelock's Scotts Square few years later.
If our tourists number can go up after IRs are completed, then it should not be a problem.

Agree that MP reit's properties are very prime, and current yield is at at attractive levels.
But there is still the risk as mentioned above.

[ucypmas]

Hi qxing78 thanks for sharing your thoughts.

My thinking is that the shopping cluster around Orchard station should prove resilient in the long run... as for tourist numbers they fluctuate according to economic cycle and in an economy like Singapore its generally better to be a landlord than a shopowner. Still, you do have a point about increased competition for shopper traffic from newer malls.

I wouldn't expect the yield to stay at current levels, as some erosion of top line revenues are likely to reduce the amount of cash available to distribute in the next 2-3 years. But certainly the price is low enough that a 50% cut in current distributions (permanently) will still leave a 7% yield at current purchase prices, throughout the holding period (which is unlikely). This is what I was thinking about the bombed out REIT prices, have the market gone too far in repricing some of them?

[Blackjack]

I share your views on this. I also think that the repricing of Reits in the market has gone a bit too far generally. Eventually businesses will still go on and require some place to do their business. There will still be use for serviced residences for business travels. Industrial companies would still run unless it is no longer profitable to do so. Financial institutions would still want to refinance those with stable and predictable cashflows. Isn't this all part of market dynamics?

Of course the concerns behind refinancing and plummeting asset prices remain a concern for those who are at the higher end of their gearings, its a matter of time we see which are the survivors. But with yields easily 15% I see there's certainly less downside than upside.

Brings to mind how this forum has also seen its fair share of "highs and lows" of darling stocks turn castaways. Investor interest has always been cyclic as well. Open declarations of confidence when they are high and hush when they fall, though we don't like to admit openly. Such is Asian mentality, mindful to claim credit when the choice is correct but quick to pass it over if otherwise, as one friend of mine once mentioned to me. Its obvious until you realise it wasn't obvious consciously all along.

For Musicwhiz - That said, perhaps you shouldn't disclose so openly your entry and portfolio performances, though I believe your intentions are good. Problem is people are generally quick to snap and jump at others' misjudgments, just like what they are doing to GIC's and Temasek's portfolios now?

[blid2def]

For Musicwhiz - That said, perhaps you shouldn't disclose so openly your entry and portfolio performances, though I believe your intentions are good. Problem is people are generally quick to snap and jump at others' misjudgments, just like what they are doing to GIC's and Temasek's portfolios now?

Well, I think whoever is snapping on MW shows what class they have (or lack, actually). As I've mentioned in this forum before, it's extremely bad taste and poor form to kick someone in the teeth when someone's choices appear incorrect (for now).

Okay, some people (or organizations) do deserve it because they go about banging their drums and clashing their cymbals proclaiming how great and infallible they are - kicking them when they're down is actually quite a pleasure.

For MW - do what makes and keeps you happy. Don't give a shit about what others say, because ultimately, bits and bytes don't break bones.

[winston]

Morgan Stanley reduced their stake from 13.85% to 12.93% on November 27

[winston]

Risks:

1) Over 90 per cent of its debt is maturing at the end of 2010 ?

2) MS Selling ?

3) AIG Selling ?

[ucypmas]

Vested.

My comments as follow;

1) I personally think they will get refinanced, despite apparently tough credit environment. Banks are sitting on lots of capital and if the right stuff comes along they will lend, at a price. So no default/blow-up risk. However new interest charges could be a lot higher (maybe 1.5x to 2x) of current rates, which will impact yields.

2) The US credit environment is likely to worsen in 2009 and investment banks are still under pressure to deleverage. So yes if MS comes under pressure to raise $$$ they could start selling in earnest which could continue to pressure unit prices.

3) This depends on who holds what. The AIG corporate in US is effectively bankrupt and they have to sell whatever to raise funds to meet payouts on their CDS bets gone bad. But the AIA in Singapore is a healthy company - and if the MP REIT investment is held on behalf of their policyholder funds for investment purposes then it probably won't come onto the market. I have no idea who holds what here.

In the short term, if both major shareholders ends up selling out big time the REIT could be in the tank for a while. But the dividend yields should be sustainable as the current prices (50-cent range) have discounted a number of things such as;
- much weaker performance by the Japan portfolio
- higher refinancing charges
- weaker performance by Singapore properties
I have no numbers to back up my claims, but the 40-cent range seen a couple of weeks ago is probably the bombed-out scenario of all the above three factors becoming much worse.

[ucypmas]

Morgan Stanley has further reduced stake from 12.929% to 11.99%. Filing was done on 26th Dec 2008.

Looks like they are set to continue selling into next year as the price shows recovery / support at current levels.

[ucypmas]

The REIT was rebranded to Starhill Global REIT today, and the CEO of YTL Group Francis Yeoh has been appointed Executive Chairman and his deputy CEO brother onto the BOD as well.

Announcement as follows;

http://www.starhillglobalreit.com/DataFiles/Announcement_ChangeofNameofMPREIT_31Dec08.pdf

http://www.starhillglobalreit.com/DataFiles/PressRelease_MPREITRenamedStarhillGlobalREIT_31Dec08.pdf

I think what will happen next is they will try to merge this REIT with their Starhill REIT in Malaysia. How they do it - depends on who is the vehicle. They will also probably try to expand the REIT although I think the credit environment now is such that big deals at proper yields are probably not doable over the next two years.

When I looked at MP REIT (now SG REIT, sounds like Singapore hor?) as an investment I thought this might eventually happen. Will see when the merger happens, whether the terms will be fair to the SG REIT holders.

[ichew]

another thing to note is their JP properties seems to have some slight issues

FLEG’s filing on Future Revolution’s and Futuregement’s ability to continue to meet their
obligations in relation to MP REIT’s portfolio of Japan properties.

http://info.sgx.com/webcoranncatth.nsf/ ... penelement