Tuesday, 31 October 2017

Intermediaries' take: OCBC slices Starhill Global Reit to 'hold' on Singapore office shortcoming

OCBC Investment Research has downsized Starhill Global Reit to a "hold" after inhabitance in its Singapore office portfolio fell strongly in the most recent quarter. 

The merchant cut its objective cost for the counter to 77 Singapore pennies from 82 pennies already. As at 9.32am on Wednesday, Starhill Global units were exchanging at 77 Singapore pennies, unaltered on the day. 

Starhill Global, an office and retail land speculation confide in (Reit) whose benefits incorporate the Ngee Ann City and Wisma Atria shopping centres, said on Oct 27 that net property pay slipped 3.5 for each penny year on year to S$41.4 million. Singapore office inhabitance fell 11.2 rate focuses to 83.5 for each penny, to a great extent from Ngee Ann City. 

The Reit has "featured that it is right now during the time spent concluding terms with imminent inhabitants for around 33% of the empty spaces". "Despite this advancement, downtime is normal given the fit-out period for new inhabitants, while rental weights are additionally liable to continue," OCBC wrote in an exploration report. 

OCBC has cut its circulation per unit figure for the Reit by 3.1 for every penny for FY2018 and by 3.8 for every penny for FY2019. 


OCBC's new proposal coordinates a "hold" call by CIMB on Oct 30. CIMB said that it expects close term income development "to stay lazy as it works through the drag from its Singapore office portfolio" and progressing remodels at Plaza Arcade.

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