2Q2011 Starhill Global

Starhill Global has released its 2Q2011 financial presentation. But how does it perform through my 5 indicators? Let's find out.

#1 High Current Dividend Yield of >5%

2Q11 dividend yield is 6.42%.

#2 High Expected Dividend Growth

1) Quality of properties in portfolio and quality of tenants

Starhill Global has ownership in popular shopping malls like Ngee Ann City and Wisma Atria in Singapore. Top 10 tenants contributed 52.2% of gross rent. Famous tenants are Nike, BreadTalk, FJ Benjamin, and vice versa.

2) Expected increase in property prices

While the 2Q11 presentation did not specifically state the property prices, I would expect the prices to increase drastically due to recent property inflation, the limited land area, and the increase of human traffic in Orchard Road.

3) Expected increase in rental

Maintains a healthy occupancy rate of 95.2%.

4) Acquisition of new properties

A large shopping mall in Orchard Road is under construction and expected to complete in 3Q2012. Famous global brands are switching over to Starhill's properties. Many ot its overseas properties are renovating and expanding.

#3 Low Gearing Ratio of <40%

Starhill Global has a healthy gearing ratio of 30.2%.

#4 REIT Stock Price Is Undervalued

NAV is $0.94 as of 2Q11. The current market price as of 29/7/11 remains at $0.65.

#5 The Stock Is Highly Diversified Within Itself

Starhill Global is widely diversified between retail and office sectors. It has properties in Malaysia, China, Japan and Australia.


Same as Cambridge Industrial Trust, Starhill Global is a good stock to buy and hold. While its dividend yield is lower than Cambridge, the capital appreciation in the long term is much attractive due to Singapore's main focus on retail and office sectors, and also the increasing population leading to more businesses in the city centre.