An official from Bursa Malaysia (centre) explaining Starhill REIT's price movement on an electronic board to (from left) YTL Corp deputy managing director Datuk Yeoh Seok Kian, Bursa head of listing Johan Abdullah, Tan Sri Francis Yeoh and YTL chairman Tan Sri Yeoh Tiong Lay
Starhill REIT debuts with 11 sen premium
The Star Online, December 17, 2005
YTL Corp Bhd's Starhill Real Estate Investment Trust (Starhill REIT) shone on its maiden day on Bursa Malaysia, boosted by strong demand for high dividend-yielding stocks.
The property trust – the country's largest to date valued at RM1.15bil – made its trading debut at RM1.07 yesterday, or 11 sen higher than what retail investors had paid during its initial public offer (IPO) last month. The counter was last traded at RM1.03 on volume of 97.9 million shares.
At the press conference after the listing ceremony in Kuala Lumpur yesterday, YTL Corp managing director Tan Sri Francis Yeoh said he regarded Starhill REIT's commendable performance as a Christmas gift to its shareholders.
"The listing had generated a lot of buzz, and we are happy with its performance,'' he said.
YTL Corp's 70% unit, Pintar Projek Sdn Bhd, will provide management services for the property trust. Post-listing, YTL Corp retains a 51% ownership in Starhill REIT.
"At the current price, Starhill REIT is yielding at above 6% and should continue to appeal to income-oriented investors,'' a fund manager said.
Institutional investors paid RM1.01 per unit and had accounted for 94% of the total 509.6 million shares offered under the property trust IPO completed exercise.
Starhill REIT was formed via the injection of two high-end shopping complexes and a five-star hotel owned by YTL Group located along the strategic Jalan Bukit Bintang in Kuala Lumpur.
Analysts said Starhill REIT is expected to pay out 100% of its profits as dividends over the next two years, as the three properties – Lot 10, Starhill Gallery and JW Marriot Hotel – would require little capital expenditure over the near term with the recent completion of renovation works prior to listing.
A local brokerage said the potential payout translates to a gross distribution per unit of 6.58 sen and 6.44 sen for financial years ending June 30, 2006 and 2007 respectively.