To recap, SG REIT’s manager recently posted a 7.6% lower 3Q18 DPU of 1.09 cents, marking its seventh consecutive quarter of y-o-y decline, driven by operational weakness from Singapore and Australia, as well as higher withholding taxes from Australia and Malaysia.
SINGAPORE (June 19): OCBC Investment Research is reiterating its “hold” call on Starhill Global REIT (SG REIT) while cutting its lower fair value estimate to 65 cents from 77 cents previously.
The lower fair value is underpinned by reduced distribution per unit (DPU) forecasts and after incorporating a lower terminal growth rate of 1% compared to 1.5% before, as well as higher cost of equity assumption of 8.5% from 8.2% previously in light of current market and sector volatilities.
