OCBC Report 27 Jan 14

KEY IDEA Starhill Global REIT: Consistent performer Summary: Starhill Global REIT (SGREIT) reported an 8.8% YoY growth in its 4Q13 DPU to 1.23 S cents, coming in within our expectations. For the quarter, Singapore portfolio continued to deliver good performance, thereby increasing its percentage revenue contribution to 65.5% from 63.0% in 4Q12. Notably, Ngee Ann City retail NPI gained 16.6% YoY amid 6.7% rental uplift from Toshin master lease renewal in 2Q. In addition, SGREIT saw a S$137.5m revaluation gain in its portfolio. As a result, gearing ratio improved by 1.6ppt QoQ to 29.0%, while book value rose by 7.3% QoQ to S$0.92. This implies a 0.82x P/B, the lowest within the local retail space. We maintain BUY on SGREIT, but revise our fair value to S$0.90 from S$0.95 to reflect higher risk-free rate and risk premium assumptions. (Kevin Tan) MORE REPORTS Fortune REIT: 4Q13 solid with Kingswood Summary: FRT reported 4Q13 results that were in line with ours and the street's expectations. Revenue rose 34.6% YoY to HK$392.6m chiefly due to contribution from Fortune Kingswood from Oct 2013, as well as higher occupancy rates and strong rental growth across the portfolio. Net property income was up 33.0% at HK$275.2m. Income available for distribution climbed 27.8% YoY to HK$182.1m. DPU increased by 16.1% to 9.72 HK cents because of the placement units (representing an increase of 8.4% over the number of prior units) issued on 6 Aug 2013. Raising the cost of equity to 8.5% from 7.9%, we lower our FV on FRT to HK$6.28 from HK$7.01. We maintain our BUY rating on FRT. (Sarah Ong)

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NEWS HEADLINES - US stocks finished the week with deep losses as investors fled equities and emerging-markets currencies on concerns about a contagion effect from China’s manufacturing slowdown. - HDB resale flat prices registered a drop in 4Q13 that was larger than estimated, leading to the first annual price decline in eight years. - Prices and rentals of industrial space in Singapore were found to have moderated in 4Q13. - Singapore's 4Q13 and 2013 GDP estimates look set to be revised higher than most expected, after the manufacturing sector grew by a surprising 6.2% in Dec 2013 from a year ago. - Blumont Group is launching an all-share bid for all of Australia-listed miner Genesis Resources. - Parkway Life REIT's 4Q13 DPU rose 4.5% YoY to 2.82 S cents, as distributable income went up 4.5% to S$17m. - Ezra Holdings' subsea services division has clinched projects worth about US$80m, including options.