Starhill Global to acquire Australia-based mall

Check out how this purchase will make Starhill’s pockets fatter.

According to OCBC Investment Research, Starhill Global REIT (SGREIT) yesterday announced the proposed acquisition of Plaza Arcade in Perth, Australia. "The purchase consideration was at A$48.0m (~S$61.9m), translating to $2,476 psf NLA. Plaza Arcade is a freehold retail property located in the city centre (next to SGREIT’s David Jones Building) and enjoys a high occupancy of 97.6%."

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According to management, the property has an NPI yield of 7.8% and is expected to contribute 0.08 S cents to SGREIT’s DPU. SGREIT intends to fund the acquisition through a combination of cash raised via its rights issue in 2009 and borrowings. Gearing in effect is likely to increase from 31.2% to 32.0% upon completion of the transaction. We now place our Buy rating and S$0.84 fair value under review pending the release of its 4Q12 results on next Tuesday, 29 Jan. (Kevin Tan)