Today, Kim Eng published a "Buy" report on Starhill Global REIT
I love to see Buy ratings in brokerage reports for stocks I already own. Don't you?
One, it increases my conviction of holding on to the stock. Two, I hope it entices more to join me in the musical chair game for this stock (so that I can sell you my seat for a higher price - that's the reward for joining the game earlier).
I bought Starhill Global recently for the third time. Here's the overall affair I've had with this stock since 2009:
a) 2009-2010, bought at $0.565, $0.54 & $0.52 and sold at $0.58
b) 2010-2011, bought at $0.565 and sold at $0.62
c) 2011-present, bought at $0.565 and holding.
After listing the 7 trades above for Starhill Global, I feel a little sad. Much more prudent for me to buy and hold the stock instead of buying and selling through the price movements. I would like to do some kind of IRR or XIRR comparison between buying & holding versus trading as I did above from (a) to (c).
Currently standing on a capital gain of ~13%, not counting in the dividends received thus far. It is quite tempting to realize the profit and put more spending money into my wallet. But where would I deploy my funds? Cordlife IPO? Haha..
Starhill Global
Top 3 reasons why I like Starhill Global:
- CEO Mr Ho Sing is the brother of another prominent family member in Singapore (Source: The Edge, can't remember which copy). The spreadsheet factor of this relationship cannot be analyzed but it does lend weight to my decision of buying in to this stock again and to acquire more on weaknesses in price.
- The tussle with Toshin (master lease holder) for Takashimaya property would eventually be ironed out for improved rental income. It would be either done immediately in the courts or eventually when the lease runs out post-renewal. It's an eventuality that the rental rates for this part of the REIT be improved.
- Decent if not good financial ratios for a retail sector REIT. I bought in recently at $0.565, that made the overall numbers like discount to Net Asset Value (NAV), dividend yield etc look attractive enough for me.
Thoughts and Side Notes
Between now and 2014, it is estimated that there'll be about 2 million square feet of retail space coming online. It's a similar scenario for industrial space. As my overall portfolio is relatively heavy on REITs (about 2/3), I'm quite apprehensive if there'll be enough tenants to go around for all this space that's being built.
Distribution Per Unit (DPU) growth is good news for shareholders, I don't think it bodes well for tenants. REITs are like jockeys and their tenants like horses. Ride them too hard and you might find that you are out of a ride. Or worse, thrown off the horse.
With additional industry and retail space coming online with all the hectic building going on - I ought to focus on REITs with some special qualities, e.g., iconic feature of the landscape like Wisma & Takashimaya of Orchard Road, Starhill Gallery of KL.
Funny how we keep building property. If population size declines, would there still be a need for so much urban built up space? With all the push to cloud computing, pay as you use in the business sphere - is it still
logical for me to continue ploughing in to REITs?
(After coming back from Perth, I wish I could have made a quick detour over to Starhill's David Jones Building. I like to see and observe the businesses that I've invested in. From this thought, I realize I'm the kind of investor who likes to interact with companies in which I hold stock. So what? If I can't interact, would I be less likely to invest? Would I miss out opportunities because of this preference??)
Cheers,
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