Sunway REIT Management Sdn. Bhd, the Manager of Sunway Real Estate Investment Trust (“Sunway REIT”), is pleased to announce its financial results ended 31 March 2016.
Nine months unaudited financial results for the period from 1 July 2015 to 31 March 2016 (“9M FY2016”)
Sunway REIT reported a set of commendable performance for the nine months of the financial year ending June 2016. Revenue increased to RM383.4 million, presenting a growth of 13.3% year-on-year (“y-o-y”). Net property income (“NPI”) expanded by 10.6% compared to the same period in the preceding year to RM283.7 million.
Retail and hotel segments are the main contributor to the encouraging set of financial performance and further supported by new income contribution from Sunway Putra Mall following its re-opening in May 2015, Sunway Hotel Georgetown and Wisma Sunway which were acquired in January 2015 and March 2015 respectively.
The retail segment remained steady despite the headwinds affecting consumer sentiment. Sunway Pyramid Shopping Mall, the largest revenue contributor to Sunway REIT, maintained its resilient performance as a leading regional mall in the Klang Valley.
Resumption of revenue contribution from Sunway Putra Mall following its re-opening in May 2015 has also contributed to the better performance for the retail segment. In all, the retail segment registered a healthy growth in revenue and NPI of 15.7% y-o-y and 13.3% y-o-y respectively.
The hotel segment performed commendably despite the moderating macroeconomic environment and fierce competition in the hospitality sub-sector. Sunway Resort Hotel & Spa, which is strategically located in the renowned Sunway Resort City (“SRC”), has enjoyed strong demand from the leisure segment particularly from the Middle Eastern market for the nine months of FY2016.
The performance from the hotel segment was further boosted by new income contribution from Sunway Hotel Georgetown which was acquired in January 2015. For the nine months of FY2016, revenue and NPI for the hotel segment expanded by 26.1% y-o-y and 25.0% y-o-y respectively.
The office segment continued to be the laggard in the financial performance of Sunway REIT. The revenue and NPI for the office segment declined by 22.7% y-o-y and 43.7% y-o-y respectively due to lower average occupancy of all office properties, with the exception of Wisma Sunway which commenced contribution from 23 March 2015 upon completion of its acquisition.
Third quarter unaudited financial results for the period from 1 January 2016 to 31 March 2016 (“3Q FY2016”)
For the third quarter ended 31 March 2016, Sunway REIT registered a set of encouraging financial performance. Revenue and NPI expanded at a double-digit of 17.7% y-o-y and 16.2% y-o-y respectively, primarily attributable to strong growth in the retail and hotel segments however partially offset by a lower performance from the office segment.
In addition to the reasons mentioned in 9M FY2016, the better performance was attributable to improvement in average occupancy at Sunway Putra Hotel following the completion of its refurbishment in December 2015.
During the quarter ended 31 March 2016, the Manager has proposed a distribution per unit (“DPU”) of 2.37 sen for 3Q FY2016, representing an increase of 11.3% compared to the same period last year. 9M FY2016 DPU increased by 5.7% to 7.06 sen, translating into an annualized yield of 5.9% based on the market closing price of RM1.60 as at 31 March 2016.
Dato’ Jeffrey Ng, CEO of Sunway REIT Management Sdn. Bhd., commented, “Despite the challenging market, the resilient assets located in SRC has held up the overall performance of Sunway REIT.”
“We expect a modest growth in DPU for FY2016 mainly contributed by new and resumption of income contribution from completion of refurbishment and acquisitions, namely Sunway Putra Mall, Sunway Putra Hotel, Sunway Hotel Georgetown and Wisma Sunway. Meanwhile, Sunway Resort Hotel & Spa has enjoyed a strong performance in 3QFY2016 boosted by leisure segment particularly from the Middle Eastern market. The higher DPU was also contributed by one-off court award amounting to RM6.189 million which was recognised in 2QFY2016.”
He added, “Meanwhile, SPE is temporarily closed since April 2016 for a 10-month refurbishment work and will be re-opened in the first quarter of 2017. The refurbishment will increase the hotel’s room inventory to 564 rooms from the current 549 and elevate the hotel from a superior to a deluxe category 4-star international-class hotel. These include 22 new family rooms and suites categories, designed to accommodate a growing increase in family and leisure travelers to the destination”.
He further elaborated, “Our RM1 billion investment in the 3-in-1 mixed use Sunway Putra is gaining traction albeit gradual in this challenging market environment. Following the refurbishment and transformation exercise, the asset/hotel manager of Sunway Putra has embarked on a rebranding and repositioning exercise as well as aggressively promoted the properties.”
“We have seen encouraging increase in footfall to Sunway Putra Mall as well as improvement in occupancy at Sunway Putra Hotel and we believe that Sunway Putra will contribute significantly to Sunway REIT over the longer term when it stabilizes after the initial gestation period.”
Mangalesri Chandrasekaran, Editor at PropertyGuru, edited this story. To contact her about this or other stories email mangales@propertyguru.com.my
