Starhill Global ( former McQ Prime )

[winston]

Vested. From OCBC:-

Starhill Global REIT: Compelling investment case; initiate with BUY rating

Summary: Starhill Global REIT (Starhill) owns 13 properties across five countries with retail and office components.

Starhill may benefit from sponsor YTL Corporation Berhad, one of the largest listed companies on the Bursa Malaysia, not only in terms of indirect and/or direct financial support but also through YTL’s strong relationships with major global retailers.

Approximately 42% of Starhill’s revenue is derived from long-tenure and master leases that provide long-term income stability to the REIT along with potential for rental upside.

Starhill is trading at a 34% discount to its book value (as of 31 Mar 2010), which we believe is unjustified considering Starhill’s high-quality assets, healthy balance sheet and its strong sponsor. Our DDM-derived fair value estimate of S$0.65 translates to an estimated total return of 26%.

Initiate coverage with BUY rating.

Key risks to our view include macro-economic headwinds, increasing competition in the retail space, foreign exchange risk and changing regulatory and taxation regimes. (Meenal Kumar)

[winston]

Not vested. From OCBC:-

Starhill Global REIT: 2Q10 in line; valuations still compelling

Summary: Starhill Global REIT (Starhill) declared a 2Q10 DPU of 0.91 S cents, down 52.1% YoY (because of an enlarged unit base post-rights issue) and down 4.2% QoQ.

The results were in line, with DPU just 3% higher than our 0.88 S cents estimate. Portfolio performance was steady but Wisma Atria’s retail and office occupancy declined from 31 Mar to 98.5% (-0.8%) and 81.4% (-0.6%) respectively.

Starhill is leveraged at 30.8% debt-to-assets as of 30 Jun; it has already secured sufficient financing to address the S$570m in debt maturing later this year. We have adjusted our expense assumptions marginally with FY10-11 DPU up 0.5% and 1.1% respectively to 3.84 S cents and 3.96 S cents.

We continue to find valuations compelling at a significant 35% discount to book value. Our DDM-derived fair value estimate of S$0.65 (6.7% discount rate, 0.5% terminal growth rate) is intact; this is equivalent to a fairly reasonable (in our opinion) 0.72x price-to-book. With an estimated total return of 16.7%, we maintain our BUY rating on Starhill. (Meenal Kumar)

[tonylim]

Published August 5, 2010

CityDev's KL site may set new price benchmark
Land for high-end condo project could top RM3,000 psf

(KUALA LUMPUR) Singapore property tycoon Kwek Leng Beng is in talks to sell a parcel of land in Jalan Bukit Bintang, Kuala Lumpur, which could possibly fetch a record price for a land deal, says a report in Malaysia's Business Times.

Mr Kwek: Contenders for site said to be Pavilion KL owner and YTL group

It is understood that the selling price for the land, owned by Mr Kwek's City Developments Ltd (CDL), is being negotiated for more than RM3,000 (S$1,282) per sq ft.

To date, the most expensive land deal reported has been Sunrise Bhd's acquisition of Wisma Angkasa Raya in Jalan Ampang, Kuala Lumpur, for RM2,588 per sq ft. In May this year, FFM Bhd and Kuok Brothers Sdn Bhd sold a piece of land in Jalan Perak, Kuala Lumpur, for RM2,200 per sq ft.

CDL's land in Jalan Bukit Bintang is about 32,000 sq ft. At RM3,000 per sq ft, the deal could fetch RM96 million.

The land sits between the Grand Millennium Kuala Lumpur hotel and the Pavilion Kuala Lumpur shopping centre. CDL, which is part of Singapore's Hong Leong Group, also owns the Grand Millennium hotel.

Contenders for the land are believed to be the owner of Pavilion Kuala Lumpur and the YTL group, both of which have sizeable assets along Jalan Bukit Bintang.

Sources told Malaysia's Business Times that the RM500 million Millennium Residences project originally planned for the site and launched in 2007 had been aborted and that the land was being negotiated for sale.

A quick check at the site revealed that the project signage and hoarding had been removed. Some work on the 42-storey high-end condominium with an additional 15-storey crown started in 2008, but has since stalled.

In late March, a spokesperson for Singapore's Hong Leong said that the Millennium Residences would be launched later this year.

However, replying to a follow-up question from MBT last week, the spokesperson said: 'There are no details on the Millennium Residences available at this point.'

When asked if the project had been scrapped and the land was being negotiated for sale, the spokesperson said: 'We have no comment at this stage.'

Pavilion Kuala Lumpur is wholly owned by Urusharta Cemerlang Sdn Bhd, which in turn is 51 per cent owned by Urusharta Cemerlang Development Sdn Bhd and 49 per cent by the Qatar Investment Authority (QIA).

Pavilion Kuala Lumpur will be managing the new Fahrenheit 88 shopping centre, previously known as KL Plaza. It belongs to Makna Mujur Sdn Bhd, which is owned by Pavilion International Development Fund Ltd, of which the principal is the QIA.

YTL owns the Starhill Gallery and Lot 10 shopping centres and the JW Marriott hotel in the vicinity.


Should be possitive news to Starhill G Reit.

[tonylim]

The retail sector in Kuala Lumpur's Klang Valley has improved since 2008, with a faster and positive leasing rate, according to a report released by CBRE.

The property consultancy firm said take up rates have improved significantly in the first half of this year than last year. Average occupancy was generally high, with several prime and non-prime retail malls in the Klang Valley area have an average occupancy rate of 92 percent at the end-Q2 compared to nearly 90 percent average occupancy rate in some malls in Kuala Lumpur.

Rental rates also rose in the second quarter, including some of the major malls like Pavilion, Suria KLCC, Mid Valley Megamall, AEON Bukit Tinggi, Gardens and Sunway Pyramid 2, and according to CBRE, overall rental rates may edge up further.

“There are reports that prime rents in Suria KLCC and Mid Valley have already risen by 10% to 30%,” it said.

“Suria KLCC prime rents have surpassed RM100 psf, and it will be interesting to see the change in the tenant mix as some under-performers exit this location.”

The market view report showed an increase in retailer demand in the second quarter; with many retailers have particular allocations for various new outlets this year.

However, the report also showed that 10 retail malls with more than three million sq ft of net lettable area are expected to be completed this year.

With this, CBRE believes that the retail market in the country is starting to divide into niches and submarkets, like the Petaling Jaya, Bangsar/Mont Kiara and Subang areas.

“The battles that will be fought in the future will be localised and the winners will be those with superior locations, tenant mixes and concepts,” said CBRE.

[winston]

Not vested. From OCBC:-

Valuation. Our DDM-derived fair value estimate of S$0.65 (6.7% discount rate, 0.5% terminal growth rate) is intact; this is equivalent to a fairly reasonable (in our opinion) 0.72x priceto-book.

With an estimated total return of 17.7%, we maintain our BUY rating on Starhill. Starhill is also one of our top picks for the S-REIT sector.

Key risks to our view include macroeconomic headwinds, foreign exchange risk and changing regulatory and taxation regimes

http://www.remisiers.org/cms_images/Sta ... 15-OIR.pdf

[tonylim]

15 September 2010
Disposal of Land in Kuala Lumpur

Millennium & Copthorne Hotels plc (“M&C”) announces that CDL Hotels (Malaysia) Sdn Bhd (the “Company”) (a wholly-owned subsidiary of M&C) has entered into an agreement (the “Agreement”) with Urusharta Cemerlang (KL) Sdn Bhd (“Buyer”) to sell a parcel of land of 29,127 square feet which is adjacent to the Grand Millennium Kuala Lumpur (the “Land”).

The shareholder of the Buyer is actively engaged in property development in Kuala Lumpur. The consideration for the Land under the Agreement is RM210 million (£42.6 million1). On the date of the Agreement, the Buyer has paid the Company a deposit of 10% of the consideration price.

Under the Agreement, certain amounts of the balance consideration are due to be paid at specified dates while the remaining amount of the consideration will be paid on completion. Among other things, completion under the Agreement is conditional upon:-

(a) the Company’s application to the relevant authorities in Malaysia for the issuance of a separate title for the Land having been approved on such terms and conditions as are reasonably acceptable to the Company; and

(b) the separate title for the Land having been issued by the relevant land authorities in Malaysia on such terms and conditions as are reasonably acceptable to the Company.

In view of the above (unless otherwise agreed between the Company and the Buyer, or otherwise provided for in the Agreement), completion is expected to occur not later than the end of the second quarter of 2012.

M&C’s carrying value of the Land is RM42.8million (£8.7 million1). Based on this value, the sale of Land is expected to result in a pre-tax profit of RM164.1 million (£33.3 million1), after taking into account transaction costs.

=End=

15 August 2010
"It is understood that the selling price for the land, owned by Mr Kwek's City Developments Ltd (CDL), is being negotiated for more than RM3,000 (S$1,282) per sq ft.

To date, the most expensive land deal reported has been Sunrise Bhd's acquisition of Wisma Angkasa Raya in Jalan Ampang, Kuala Lumpur, for RM2,588 per sq ft. In May this year, FFM Bhd and Kuok Brothers Sdn Bhd sold a piece of land in Jalan Perak, Kuala Lumpur, for RM2,200 per sq ft.

CDL's land in Jalan Bukit Bintang is about 32,000 sq ft. At RM3,000 per sq ft, the deal could fetch RM96 million."

On 15 August 2010 , they talked about RM 3,000 per sq ft , but now the actual transacted price is RM 7209 per sq ft. So it is more tham double of what originally expected.
So Starhill Gallary and Lot 10 should cost much more by now.

[winston]

Not vested. From OCBC:-

Starhill Global REIT: Compelling from both yield & P/NAV perspective

Summary: New retail space at The Shoppes at Marina Bay Sands has begun to open but we believe cannibalization concerns for retail landlords such as Starhill Global REIT may be exaggerated.

We are positive on the retail property sector as:-
1) tourism and increasing consumer confidence are likely to drive retail spending; and
2) we find the sector attractive, relative to the residential sector, which has significant policy overhang.

We estimate that Singapore retail contributes roughly 51.9% of Starhill’s FY10F gross revenue and 47.6% of FY11F gross revenue.

Starhill is one of our top picks for the sector as it trades at a significant 35% discount to book value vis-à-vis the meager 4% discount-to-book offered on average by the broader S-REIT sector.

We believe this discount is unjustified when considering Starhill’s high-quality assets, healthy balance sheet and its strong sponsor.

Maintain BUY rating and S$0.65 fair value. (Meenal Kumar)

[winston]

Not vested

Gaping vacancies among Ngee Ann City offices

(SINGAPORE) Right in the heart of the city, some high-quality office space is going abegging.

Source: Business Times

[winston]

- Around 20 percent of the space in Ngee Ann City's office towers on Orchard Road, owned by Ngee Ann Development, is believed to be vacant.

The vacancy rate is probably the highest in an office building in the Orchard Road area.


Source: Reuters

[tonylim]

M.Bay took away some good tenants.
CDL's Republic plaza will lose Barclays to Ocean building .