Thursday, October 13, 2016

Recent Buy - Starhill Global REIT

Bought Starhill Global REIT 5000 shares @ $0.81


  1. Hi there! I've recently started to watch this counter... So would like to ask you, what prompted your buying (I assume you're accumulating?) into this counter, and if possible, why this price?

    Due to fundamental or technical, or something else altogether?

    I look forward to hearing from you :)

    1. Hi Soon Chuan,

      I bought for a few reasons:
      1. Rebalancing of portfolio. Currently my portfolio has >60% in bonds, so I'm slowly accumulating equities and REIT. I'm targetting for 50% equities (including REIT) for the current market level.
      2. Starhill Global REIT has been in my watchlist for some time. It's primary attraction for me is their prime properties in Orchard.
      3. Gearing was decent at ~35%
      4. Valuation multiples are relatively less expensive compared to Capitamall Trust. Capitamall Trust is also in my watch list, but I think it's currently trading at premium compared to Starhill.
      5. It's past track record has shown that the REIT manager was capable to grow the DPU over time at 5-6% CAGR.
      6. It's exposure to Australia may benefit from strengthening of AUD. I don't think SGD will trade at parity to AUD forever.
      7. Decent yield at >6%

      Now having said all the above, I may be wrong in my analysis and assumption. Hence Starhill exposure in my portfolio is < 1% of total portfolio. As my intention is to hold for long term, I don't really "time" my purchase using technical analysis.

  2. Why, thank you - for your comprehensive explanation!

    Indeed, I am also considering REITs for long term "investment", mainly to collect dividend income. Currently vested in a business trust as well as a local industrial REIT...

    Understand that SG REIT is both an office and retail REIT, hence I'm considering this as a diversification (though one might disagree otherwise on the basis that they are still, well, REITs!)

    Before this, I did not deliberate much on the currency (AUD) factor in relation to SGD, but now that you've mentioned it, I'll take note of it :)

    Thanks again, Yaruzi!

    Keep your portfolio updated here! :P

  3. Hi Yaruzi... Just wanna check with you... The last closing price for Starhill was at 0.745... Would love to hear your views on this :)

    1. Starhill went ex dividend on 3rd Nov. Based on my buying price minus dividend, the break even point will be at 0.792. SG stocks, particularly, REITS, has weakened ever since Donald Trump win. Frankly I will slowly add to my holdings on weakness. Telco seemed yummy too.

    2. Exactly! Looks like an opportunity for accumulation :) Closely watching the Telcos too - since the approval of the fourth is still pending :)

    3. Hi Yaruzi, it's me again! Do you see yourself as more of a technical or a fundamental investor?

      Recently, Starhill has been hovering between 0.750-0.765... (it even went down as much as 0.74!)

      I am considering an entry into this counter (current price at the time of writing: 0.755-0.76).

      What do you think? :)

    4. I think I'm just a long term investor :-). I went to Orchard recently and I'd say there was no lack of human traffic. Every dip in price is a good opportunity to own a small piece of prime properties.

    5. Thank you for your insight :)