Should You Invest In Starhill Global REIT [Fundamental Analysis]

Updated: Oct 20, 2023

In this article, we'll be conducting a fundamental analysis of Starhill Global REIT and its suitability to achieve the following investment objective: To deliver a stable dividend yield of 5% to 6% per year while having a high degree of capital preservation ability.

Information Is Accurate Up To Oct 2023

Business Description

Starhill Global REIT is a Retail REIT that was listed in 2005 and owns a total of 9 properties.

What I Like About Starhill Global REIT

Historically high levels of dividend yield (Average: 6.51%) – largely due to lower underlying lease expiry and the “unattractiveness” of the REIT.
Management is very conservative with their debt management and often has a high degree of hedged borrowings

What I Do Not Like About Starhill Global REIT

Poor management which resulted in regular capital destruction
Poor track record in foreign property investments
Portfolio is not diversified & largely concentrated in Ngee Ann City & Wisma Atria (Fig 10)
Lease expiry of flagship properties is relatively lower as compared to other retail REITs (Ngee Ann City – 2072 Wisma Atria – 2061)

Updates From Recent Performance (FY 2022/2023)

General Comments:

The market has already priced in the headwinds for Starhill Global REIT’s foreign property and the price is now trading at a heavy discount from book value.

Positive Headwinds:

Majority of the debt that is due for refinancing comes in 2025 and beyond of which interest rates are expected to start trending downwards.

Negative Headwinds:

Further deterioration in foreign property values is to be expected given a stronger Singapore Dollar and a global economic slowdown.

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- Work In Progress -

Daniel is a Licensed Independent Financial Consultant with MAS and a Certified Financial Planner (CFP®). Connect with me on social media platforms to receive updates on future content! You can also slide into my DMs if you have any questions :)