I am part of a small Whatsapp group of awesome bloggers. Just the other day one was asking, ‘Between MidValley and Sunway, which one is better to buy if I want to buy a Real Estate Investment Trust (REIT)?’ Sunway REIT had just sent me their press release. So, do read on if you think REIT is for you.
FINANCIAL RESULTS ANNOUNCEMENT
SUNWAY REIT REGISTERED A MODERATE NET PROPERTY INCOME GROWTH OF 4.0% FOR THE FINANCIAL YEAR ENDED JUNE 2017
Key Highlights:
o Revenue expanded by 3.1% year-on-year to RM522.9 million boosted by stronger than expected performance in the retail and hotel segments in the fourth quarter of FY2017
o Sunway REIT proposed and declared a marginally higher distribution per unit of 9.19 sen, translating into a distribution yield of 5.2% and a total return of 12.4% for FY2017
o Sunway REIT has completed the acquisition of an industrial property, Sunway REIT
Industrial – Shah Alam 1, marking its maiden foray into the industrial segment.
Financial Highlights
| FYE June 2017 | Current Quarter | Financial Year | |||||
| 4Q2017 | 4Q2016 | Change | 2017 (Unaudited) | 2016(Unaudited) | Change | ||
| RM’000 | RM’000 | % | RM’000 | RM’000 | % | ||
| Gross revenue | 132,536 | 123,585 | 7.2 | 522,868 | 507,013 | 3.1 | |
| Net property income (NPI) | 98,516 | 90,170 | 9.3 | 388,817 | 373,851 | 4.0 | |
| Net Realised income | 66,818 | 60,618 | 10.2 | 270,586 | 262,473 | 3.1 | |
| Unrealised income / (loss)1 | 152,024 | 62,279 | >100.0 | 153,898 | 61,223 | >100.0 | |
| Total profit for the period1 | 218,842 | 122,897 | 78.1 | 424,484 | 323,696 | 31.1 | |
| Proposed / declared distribution | (66,853) | (62,411) | 7.1 | (270,652) | (270,075) | 0.2 | |
| Distribution per unit (DPU) (sen) | 2.27 | 2.12 | 7.1 | 9.19 | 9.18 | 0.1 | |
| Distribution yield (Based on unit price of RM1.78 per unit on 30 June 2017) | N.A | N.A | 5.2% | 5.5%2 | N.A | ||
1 Mainly contributed by fair value gains arising from asset revaluation
2 Based on actual DPU of 9.18 sen declared in FY2016 and unit price of RM1.66 as at 30 June 2016.
N.A. denotes not applicable
Bandar Sunway, 10 August 2017 – Sunway REIT Management Sdn. Bhd., the Manager of Sunway Real Estate Investment Trust (“Sunway REIT”), is pleased to announce its financial results for the period ended 30 June 2017.
Financial year 2017 unaudited financial results for the period from 1 July 2016 to 30 June 2017 (“FY2017”)
Sunway REIT has reported a marginally higher distribution per unit (DPU) in FY2017 despite the disruption of income arising from the refurbishment of Sunway Pyramid Hotel, which was closed since April 2016. For the financial year ended 30 June 2017, Sunway REIT proposed and declared a total DPU of 9.19 sen, representing a marginal increase of 0.1% compared to FY2016. Based on the unit price of RM1.78 as at 30 June 2017, this translated into a distribution yield of 5.2%.Sunway REIT has achieved a total return of 12.4%, contributed by distribution yield of 5.2% and appreciation in unit price of 7.2%.
For the financial year ended 30 June 2017, revenue expanded by 3.1% year-on-year (y-o-y) to RM522.9 million, boosted by stronger than expected performance from the retail and hotel segments in the fourth quarter of FY2017, resilient performance from the retail segment throughout the financial year and gradual improvement in the office segment. Net property income (NPI) rose by 4.0% y-o-y to RM388.8 million in FY2017, mainly attributable to higher NPI across all segments.
Retail segment remained as the largest contributor to revenue and NPI growth. Revenue and NPI for the retail segment grew by 5.8% y-o-y and 7.6% y-o-y respectively, contributed by higher average occupancy rate and average rental rates at Sunway Pyramid, Shopping Mall and Sunway Carnival Shopping Mall. In addition, Sunway Putra Mall has recorded improving performance in the second year of operation. Revenue and NPI for Sunway Putra Mall in the previous year was lower due to 2.5-month rebate granted during the initial opening of the mall.
After a lull period, the office segment reported improvement in revenue and NPI on the back of higher average occupancy rates for Menara Sunway and Sunway Putra Tower. The stronger set of financial performance was partially offset by lower contribution from the hotel segment mainly due to disruption in income contribution by Sunway Pyramid Hotel which was closed for refurbishment since April 2016.
Fourth quarter unaudited financial results for the period from
1 April 2017 to 30 June 2017 (“4Q FY2017”)
Sunway REIT reported a revenue of RM132.5 million in the 4Q FY2017, representing a growth of 7.2% compared to the corresponding quarter in the preceding year. NPI increased correspondingly by 9.3% y-o-y to RM98.5 million. The financial performance for the quarter was stronger than expected contributed by the retail and hotel segments coupled with gradual improvement from the office segment.
The higher income from the hotel segment was attributable to stronger demand for MICE activities at Sunway Resort Hotel & Spa and Sunway Pyramid Hotel upon the full completion of its refurbishment in 4Q FY2017. The hotel was progressively opened since November 2016.
For the quarter ended 30 June 2017, the Manager proposed a DPU of 2.27 sen, representing an increase of 7.1% compared to the same period last year. Dato’ Jeffrey Ng, CEO of Sunway REIT Management Sdn. Bhd., commented, “I am pleased to share that we managed to report a marginally higher DPU than the previous financial year despite the income disruption arising from the closure of Sunway Pyramid Hotel. It is indeed a better than expected set of financial results for this financial year.”
On 1 August 2017, Sunway REIT has completed the acquisition of its maiden industrial property in Shah Alam. Thereafter, Sunway REIT announced the proposed acquisition of the mixed-use Sunway Clio comprising a 4-star hotel, a retail podium and car park bays for a purchase consideration of RM340 million on 3 August 2017.
He added, “We continue to grow and diversify our income base in order to deliver sustainable growth in DPU over the long-term horizon. We expect the new acquisitions to contribute positively to our DPU.”
Sharing on the prospects, he commented, “Indicators are pointing towards a gradual recovery in consumer sentiment and business confidence supported by continuous growth in the domestic economy. Sunway REIT is well-positioned to capitalise on the recovery based our diversified portfolio of properties.”
He elaborated, “Barring any unforeseen circumstances, we expect Sunway REIT’s DPU to grow moderately supported by moderate growth in the retail segment, resumption in income contribution from Sunway Pyramid Hotel following the full completion of its refurbishment in June 2017 and gradual improvement in the overall occupancy of the office segment. In addition, we expect new income contribution from the recent acquisitions to contribute positively to the DPU in FY2018 and beyond.”
On 4 August 2017, Sunway REIT bagged the Gold Award for The Asia Pacific Best of the Breeds REITs Awards 2017 for Retail REIT (Malaysia) in Singapore. The award recognises REITs and managers with the highest standards and performance in the Asia Pacific REITs sector.
— end of press release —
next suggested article: My first visit to Sunway Velocity Mall
0 Responses
Hi Charles,
What do you think of SUNREIT? : )
I think REITs which have shown continuous profits n dividend returns are okay. Above 7% would be best.
Hi Charles,
Thanks for your reply.