Starhill REIT Ambitious Asset Acquisition

Digest this:

Starhill Real Estate Investment Trust (Starhill REIT) is acquiring the hotel properties and business assets of three Marriott hotels in Australia for A$415mil (RM1.3bil) cash.

If you follow M-REIT investing news like me, you would read in the news today that Starhill REIT is “on the move”.

Ok, before that, a bit of a history of Starhill REIT. In June 2010, the management of Starhill REIT (headed by YTL boss Tan Sri Francis Yeoh) had sold off two of its defensive, retail assets, namely Starhill Gallery and Lot 10 to focus on hospitality-related assets portfolio.

This makes this REIT pretty boring and “unattractive” compared to other REITs in Bursa. It’s like the winner of Malaysian Dream Girl compared to say, Victoria Secret Angel, Miranda Kerr?

I actually did talk about this REIT in the REIT Method course. members would be familiar with this in Module 4.

Things has been quiet since then, until now. In summary, a very ambitious asset acquisition. Unlike S-REIT, M-REIT assets portfolios are primarily focused on local properties, aside from Al-Aqar REIT which recently also acquired assets both in Indonesia and Australia.

It makes it worthwhile again to scrutinize the crucial figure in its financial reports after it has completed the acquisition.

Here is the news piece:

YTL Corporation Bhd managing director Tan Sri Francis Yeoh Sock Pingsaid on Wednesday the acquisition of these hotels would enlarge the trust’s portfolio to about RM3bil from RM1.58bil now.

StarHill REIT acquire Aussie assetsAmInvestment Bank Bhd, the manager of the trust, said the proposed acquisition was expected to be funded through a combination of bank borrowings and cash.

AmInvestment said the proposed acquisition would also enhance Starhill REIT’s position as a pure play international hospitality REIT.

Starhill REIT had on Wednesday inked the agreements to acquire the Sydney Harbour Marriott Hotel, Brisbane Marriott Hotel and Melbourne Marriott Hotel from Commonwealth Managed Investments Ltd, 30 Pitt Street Pty Ltd, 515 Queen Street Pty Ltd and Lonex Pty Ltd. Yeoh, who is also CEO of Pintar Projek Sdn Bhd, the manager of Starhill REIT, said the acquisitions would result in more than half of Starhill REIT’s property value constituted by its hotel assets in Australia and Japan.

He said the acquisitions would make this the largest portfolio of overseas property investments of any Malaysian REIT.

Source: TheStar

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