Sunway Real Estate Investment Trust · MYX:SUNREIT
Sunway Real Estate Investment Trust — Q4 FY2019 Earnings Presentation
57 slides from Sunway Real Estate Investment Trust's earnings presentation, Aug 8, 2019
Slide 1: Financial Results Fourth Quarter Ended 30 June 2019
FINANCIAL RESULTS Fourth Quarter Ended 30 June 2019 (FYE 30 June 2019) 8 August 2019
Slide 2: Disclaimer
Disclaimer This presentation is for information purposes only and does not constitute an offer, solicitation or advertisement with respect to the purchase or sale of any security of Sunway Real Estate Investment Trust (“Sunway REIT”) and no part of it shall form the basis of, or be relied on in conn
Slide 3: Table of Contents
Table of Contents 1. Financial Highlights (4Q2019) 2. Financial Results (4Q2019) 3. Portfolio Performance (4Q2019) 4. Property Development Activities & Assets Enhancement Initiatives 5. Market Outlook 6. Investor Relations Appendix - Property Performance (4Q2019) Empowering Businesses Curating Exp
Slide 4: Financial Highlights (4Q2019)
FINANCIAL HIGHLIGHTS (4Q2019) Empowering Businesses Curating Experiences Enriching Lives 4
Slide 5: Quarterly Distribution Per Unit (DPU)
Quarterly Distribution Per Unit (“DPU”) Quarterly DPU (sen) Distribution Details Distribution Period 1 April 2019 - 30 June 2019 2.28 2.15 Distribution Per Unit (DPU) (sen) 2.28 Notice of Entitlement 8 August 2019 Ex-Dividend Date 23 August 2019 Book Closure Date 26 August 2019 4Q2019 4Q2018 Payment
Slide 6: 5-Year Quarterly DPU
5-Year Quarterly DPU 1Q 2Q 3Q 4Q 9.57 9.57 9.59 9.18 9.18 9.19 9.19 8.73 8.73 2.15 2.28 2.12 2.27 7.31 2.05 2.37 2.58 2.13 2.37 2.37 2.38 2.25 2.27 2.57 2.28 2.28 2.12 2.27 2.67 2.48 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 5-Year DPU CAGR Distribution Yield 2.8% 5.13% (Based on unit price of RM 1.87
Slide 7: Financial Highlights – 4Q2019
Financial Highlights – 4Q2019 Highlights 4Q 2019 4Q 2018 No. of Properties 17 16 Property Value (RM'billion) 8.047 7.280 Units in Circulation 2,945,078,000 2,945,078,000 Unit Price as at 30 June 2019 (RM) 1.87 1.77 Market Capitalisation (RM'billion) 5.507 5.213 Net Asset Value ("NAV") Per Unit (RM)
Slide 8: Financial Highlights – 4Q2019 (Cont'd)
Financial Highlights – 4Q2019 (Cont’d) Reported in RM’000 Gross revenue 4Q 2019 145,559 Gross Revenue for 4Q2019 increased by 6.8% 6.8% or RM9.3 million compared to 4Q2018 mainly attributable to contribution from newly acquired Sunway university & college campus and better 4Q 2018 136,252 performanc
Slide 9: Financial Highlights – YTD 4Q2019
Financial Highlights – YTD 4Q2019 Reported in RM’000 Gross revenue YTD 4Q2019 143,741 139,500 151,499 145,559 580,299 Gross Revenue for YTD 4Q2019 increased by 2.8% 3.5% 3.5% or RM19.9 million compared to YTD 4Q2018 mainly contributed by better performance of all business segments, except for YTD ho
Slide 10: Financial Results (4Q2019)
FINANCIAL RESULTS (4Q2019) Empowering Businesses Curating Experiences Enriching Lives 10
Slide 11: Statement of Comprehensive Income – Consolidated
Statement of Comprehensive Income – Consolidated 4Q 2019 4Q 2018 Change YTD 2019 YTD 2018 Change RM'000 RM'000 % RM'000 RM'000 % Gross revenue 145,559 136,252 6.8% 580,299 560,406 3.5% Property operating expenses (34,377) (35,978) -4.4% (140,604) (140,476) 0.1% Net property income 111,182 100,274 10
Slide 12: Statement of Comprehensive Income – Consolidated (Cont'd)
Statement of Comprehensive Income – Consolidated (Cont’d) Explanation: 1 Interest income for 4Q2019 was lower by RM1.0 million mainly due to higher investment in money market instrument and higher interest income from financial institutions in the preceding year corresponding quarter. 2 Other income
Slide 13: Statement of Financial Position – Consolidated
Statement of Financial Position – Consolidated 30.06.19 30.06.18 30.06.19 30.06.18 (Unaudited) (Audited) (Unaudited) (Audited) RM'000 RM'000 RM'000 RM'000 ASSETS Non-current assets Units in circulation ('000 units) 2,945,078 2,945,078 1 Investment properties 8,047,410 7,280,225 Plant and equipment 1
Slide 14: Statement of Financial Position - Consolidated (Cont'd)
Statement of Financial Position - Consolidated (Cont’d) Explanation: 1 Investment properties increased by RM767.2 million primarily attributable to acquisition of Sunway university & college campus of RM555.9 million, recognition of fair value gain on investment properties of RM107.7 million, refurb
Slide 15: Statement of Cash Flows – Consolidated
Statement of Cash Flows – Consolidated Cumulative Quarter ended 1 Net cash from operating activities for YTD 4Q2019 was 30.06.2019 30.06.2018 RM399.4 million, higher by RM20.4 million compared to RM'000 RM'000 YTD 4Q2018, in line with the higher net property income OPERATING ACTIVITIES Cash receipts
Slide 16: Debt Profile as of 30 June 2019
Debt Profile as of 30 June 2019 Facility Limit Amount Maturity Profile (RM'million) RM'million RM'million Revolving Loan (USD100m) 392.3 391.3 1 Commercial Papers (CP) / 2 3,000.0 1,500.0 Revolving Loan (RL) 3 Unrated MTNs 10,000.0 1,200.0 1,500.0 Total Gross Borrowings 3,091.3 200.0 Unamortised tra
Slide 17: Portfolio Performance (4Q2019)
PORTFOLIO PERFORMANCE (4Q2019) Empowering Businesses Curating Experiences Enriching Lives 17
Slide 18: Revenue & NPI growth in 4Q2019
Revenue & NPI growth in 4Q2019 Reported in RM’million Retail Hotel Office Revenue 15.0 20% 10.0 4Q2019 105.8 4Q2018 101.2 5% 18.7 9.1 10% NPI 4Q2019 77.2 13.4 21% 5.9 4Q2018 70.7 9% 17.0 5.4 8% The office segment recorded Notes The retail segment recorded The hotel segment recorded gross revenue of
Slide 19: Revenue & NPI growth in 4Q2019 (Cont'd)
Revenue & NPI growth in 4Q2019 (Cont’d) Reported in RM’million Services Industrial & Others Overall Revenue 4Q2019 13.2 1.5 145.6 4Q2018 5.8 129% 1.4 10% 136.3 7% NPI 4Q2019 13.2 1.5 111.2 4Q2018 5.8 129% 1.4 10% 100.3 11% The services segment Sunway REIT Industrial - Shah Revenue of the portfolio N
Slide 20: Revenue & NPI growth YTD 4Q2019
Revenue & NPI growth YTD 4Q2019 Reported in RM’million Retail Hotel Office Revenue YTD 4Q2019 426.7 78.6 5% 38.4 YTD 4Q2018 416.5 2% 82.6 33.5 15% NPI YTD 4Q2019 310.5 71.3 8% 21.4 YTD 4Q2018 296.9 5% 77.7 17.5 22% The retail segment recorded The office segment recorded Notes gross revenue of RM426.
Slide 21: Revenue & NPI growth in YTD 4Q2019 (Cont'd)
Revenue & NPI growth in YTD 4Q2019 (Cont’d) Reported in RM’million Services Industrial & Others Overall Revenue YTD 4Q2019 30.7 5.9 580.3 YTD 4Q2018 22.7 35% 5.1 15% 560.4 4% NPI YTD 4Q2019 30.7 5.9 439.7 YTD 4Q2018 22.7 35% 5.1 15% 419.9 5% The services segment Revenue and NPI of Sunway Notes contr
Slide 22: 4Q2019 and YTD 4Q2019 Revenue Contribution (by Property)
4Q2019 and YTD 4Q2019 Revenue Contribution (by Property) YTD 4Q YTD 4Q 4Q 2019 4Q 2018 Variance Change 2019 2018 Variance Change By Property RM'mil RM'mil RM'mil % RM'mil RM'mil RM'mil % Sunway Pyramid Mall 81.3 76.9 4.4 5.8% 327.9 314.3 13.7 4.3% Sunway Carnival Mall 11.8 11.5 0.3 2.5% 47.1 46.8 0.
Slide 23: 4Q2019 NPI and NPI Margin Contribution (by Property)
4Q2019 NPI and NPI Margin Contribution (by Property) NPI NPI Margin 4Q 2019 4Q 2018 Variance Change 4Q 2019 4Q 2018 Variance By Property RM'mil RM'mil RM'mil % % % % Sunway Pyramid Mall 64.2 57.6 6.5 11.3% 78.9% 75.0% 3.9% Sunway Carnival Mall 7.1 6.5 0.6 9.1% 59.9% 56.3% 3.6% SunCity Ipoh Hypermark
Slide 24: YTD 4Q2019 NPI and NPI Margin Contribution (by Property)
YTD 4Q2019 NPI and NPI Margin Contribution (by Property) NPI NPI Margin YTD 4Q 2019 YTD 4Q 2018 Variance Change YTD 4Q 2019 YTD 4Q 2018 Variance By Property RM'mil RM'mil RM'mil % % % % Sunway Pyramid Mall 256.9 237.9 19.0 8.0% 78.3% 75.7% 2.6% Sunway Carnival Mall 27.8 29.1 (1.3) -4.6% 59.0% 62.1%
Slide 25: Key Performance Indicators – YTD 4Q2019
Key Performance Indicators – YTD 4Q2019 Industrial & Retail Hotel Office Services Others Average Occupancy 96% 69% 72% 100% 100% Rates NPI Margin 73% 91% 55% 100% 100% Empowering Businesses Curating Experiences Enriching Lives 25
Slide 26: Property Development Activities & Asset Enhancement Initiatives (AEI)
PROPERTY DEVELOPMENT ACTIVITIES & ASSET ENHANCEMENT INITIATIVES (AEI) (4Q2019) Empowering Businesses Curating Experiences Enriching Lives 26
Slide 27: Property Development Activities
Property Development Activities Expansion of Sunway Carnival Shopping Mall Estimated total property development RM 353.0 million cost (including land) Cummulative cost incurred from initiation RM 65.9 million to YTD 4Q 2019 Duration Approximately 3 years from 3Q 2018 Approximately 350,000 sq ft of a
Slide 28: Asset Enhancement Initiatives (AEI)
Asset Enhancement Initiatives (AEI) Sunway Resort Hotel & Spa Grand Ballroom & Meeting Rooms Refurbishment Estimated total renovation cost RM 55.0 million Cumulative cost incurred from RM 44.0 million initiation to YTD 4Q2019 Duration 4 months from July 2018 Status of completion Completed Empowering
Slide 29: Market Outlook (4Q2019)
MARKET OUTLOOK (4Q2019) Empowering Businesses Curating Experiences Enriching Lives 29
Slide 30: General Outlook
General Outlook o Global economy in the first quarter of CY2019 expanded moderately, however, the outlook for the remaining of CY2019 remains cautious stemming from unresolved trade tensions leading to uncertainties in global trade and investment activities. The International Monetary Fund (IMF) has
Slide 31: General Outlook
General Outlook o Following a 25bps cut in the Overnight Policy Rate (OPR) in May 2019, the Monetary Policy Committee (MPC) has maintained the OPR at 3.00% in July 2019. Taking guidance from global interest rate trend, particularly, the Fed Fund Rate, the MPC maintained an accommodative monetary pol
Slide 32: Retail Segment
Retail Segment o The Retail Group Malaysia (RGM) has made an upward revision in its retail sales growth forecast to 4.9% from 4.5% previously, on the back of better-than-expected growth in 1Q CY2019 and higher growth expectation in 2Q CY2019 amidst Hari Raya festivity. The Malaysian retail industry
Slide 33: Hotel Segment
Hotel Segment o Tourist arrivals for the year started on a solid ground. In the 1Q CY2019, The Tourism, Arts and Culture Ministry reported a 2.7% growth in tourist arrivals to 6.71 million with a spike in tourism receipt of 16.9% to RM21.4billion. Despite a lower contribution from Singapore, being t
Slide 34: Office Segment
Office Segment o The fundamental challenge for the office sub-sector persisted on the back of massive oversupply situation coupled with high supply pipeline. This is exacerbated by slow take- up rate which exert further pressure on the tenant-led office market going forward. o In the absence of majo
Slide 35: Investor Relations (4Q2019)
INVESTOR RELATIONS (4Q2019) Empowering Businesses Curating Experiences Enriching Lives 35
Slide 36: Unit Price Performance from IPO to YTD 4Q FY2019
Unit Price Performance from IPO to YTD 4Q FY2019 Unit Price Performance of Sunway REIT versus Benchmarks (8 July 2010 – 30 June 2019) GPR APREA Composite REIT Index - Malaysia 140.0% 161.0% 120.0% 100.0% 80.0% Sunway REIT 60.0% 107.8% 40.0% 20.0% FBM KLCI 0.0% 27.1% Dec 2010 Dec 2012 Dec 2014 Dec 20
Slide 37: Unit Price Performance for YTD 4Q FY2019
Unit Price Performance for YTD 4Q FY2019 Unit Price Performance of Sunway REIT versus Benchmarks (30 June 2018 – 30 June 2019) 15.0% Sunway REIT 10.0% 5.7% Bursa Malaysia REIT Index 5.0% 3.2% 0.0% Jun 2018 Sep 2018 Dec 2018 Mar 2019 Jun 2019 -5.0% FBM KLCI -1.2% -10.0% Performance Statistics (30 Jun
Slide 38: Indices Representation
Indices Representation o FTSE Bursa Malaysia Mid 70 Index o Bursa Malaysia REIT Index o FTSE4Good Bursa Malaysia Index o GPR APREA Composite REIT Index – Malaysia o FTSE EPRA NAREIT Global REIT Index o FTSE EPRA NAREIT Global Index o FTSE EPRA NAREIT Asia ex Japan Index o FTSE EPRA NAREIT Asia Pacif
Slide 39: Unitholders' Composition (as at 30 June 2019)
Unitholders’ Composition (as at 30 June 2019) Foreign Retail 11.2% 5.7% Sunway Institutions & Berhad 40.9% Corporate 53.5% Domestic 88.8% June 2019 March 2019 Q-o-Q Change No of unitholders 12,966 12,685 281 (2.2%) Retail unitholders 5.7% 6.4% -0.7% Foreign unitholders 11.2% 9.4% 1.8% Sunway Berhad
Slide 40: Analysts Recommendation (as at June 2019)
Analysts Recommendation (as at 30 June 2019) 10.2 10.7 Target Price as at 30 June 2019 (RM) 8.0 Upside / Downside to unit price as at 30 June 2019 (%) 4.5 4.3 2.7 2.06 2.05 2.02 1.92 1.90 1.6 2.07 1.95 1.90 1.6 1.85 1.84 1.80 1.75 1.74 1.70 (1.1) (1.6) (3.7) (6.4) (7.0) (9.1) UOB Kay Hian CLSA TA Re
Slide 41: Comparative Yields for Various Assets
Comparative Yields for Various Assets 7.0% 6.41%2 6.15%5 6.0% 5.13%1 5.0% 4.0% 3.63%3 3.10%4 3.00%6 3.0% 2.0% 1.0% 0.0% Sunway REIT M-REITs 10-Year MGS Fixed Deposit EPF Yield OPR Note: 1 Distribution yield is computed based on consensus FY2019 DPU of 9.60 sen and unit price as at 30 June 2019 (Sour
Slide 42: Appendix: Property Performance (4Q2019)
APPENDIX: PROPERTY PERFORMANCE (4Q2019) Empowering Businesses Curating Experiences Enriching Lives 42
Slide 43: Retail Properties - Sunway Pyramid Shopping Mall
RETAIL PROPERTIES - Sunway Pyramid Shopping Mall Projected lease expiry schedule Average occupancy rate 60.0% 100.0% 98.3% 98.9% 98.9% 98.1% 98.0% 98.2% 50.0% 95.0% 40.0% 90.0% 30.0% 85.0% 20.0% 80.0% 10.0% 2.6% 75.0% 51.2% 28.2% 15.0% 0.0% Jun-15 Jun-16 Jun-17 Jun-18 YTD 4Q YTD 4Q FY2020 FY2021 FY2
Slide 44: Retail Properties - Sunway Carnival Mall
RETAIL PROPERTIES - Sunway Carnival Mall Average occupancy rate Projected lease expiry schedule 80.0% 100.0% 97.3% 97.6% 97.3% 97.4% 97.3% 94.4% 95.0% 60.0% 90.0% 40.0% 85.0% 20.0% 80.0% 71.9% 12.8% 10.0% 1.6% 75.0% 0.0% Ju n-15 Ju n-16 Ju n-17 Ju n-18 YTD 4Q YTD 4Q FY2020 FY2021 FY2022 Monthly tena
Slide 45: Retail Properties - SunCity Ipoh Hypermarket
RETAIL PROPERTIES - SunCity Ipoh Hypermarket Average occupancy rate 100% 100% 100% 100% 100% 100% 100% 95% 90% 85% 80% 75% Ju n-15 Ju n-16 Ju n-17 Ju n-18 YTD 4Q YTD 4Q 2019 2018 SunCity Ipoh Hypermarket is leased to a single tenant, a major hypermarket and retailer chain operating under the “Giant”
Slide 46: Retail Properties - Sunway Putra Mall
RETAIL PROPERTIES - Sunway Putra Mall Average occupancy rate Projected lease expiry schedule 60.0% 100.0% 90.7% 90.4% 90.7% 50.0% 86.3% 82.4% 80.0% 74.9% 40.0% 60.0% 30.0% 40.0% 20.0% 20.0% 10.0% 13.3% 53.7% 11.8% 9.4% 0.0% 0.0% Jun-15 Jun-16 Jun-17 Jun-18 YTD 4Q YTD 4Q FY2020 FY2021 FY2022 Monthly
Slide 47: Retail Properties - Sunway Clio Retail
RETAIL PROPERTIES - Sunway Clio Retail Average occupancy rate Projected lease expiry schedule 40.0% 100.0% 89.7% 30.0% 80.0% 65.8% 65.9% 60.0% 20.0% 37.6% 40.0% 10.0% 20.0% 3.0% 30.3% 0.0% 14.8% 4.5% 0.0% 0.0% Jun-16 Jun-17 Jun-18 YTD 4Q YTD 4Q FY2020 FY2021 FY2022 Monthly 2019 2018 tenancy Note : T
Slide 48: Hospitality Properties - Sunway Resort Hotel & Spa
HOSPITALITY PROPERTIES - Sunway Resort Hotel & Spa Average occupancy rate 90.0% 81.2% 81.5% 80.0% 78.0% 73.5% 73.5% 70.0% 65.4% 60.0% 50.0% Ju n-15 Ju n-16 Ju n-17 Ju n-18 YTD 4Q YTD 4Q 2019 2018 Note 1: The hotel properties are under 10-year master leases. The master lease of Sunway Resort Hotel &
Slide 49: Hospitality Properties - Sunway Pyramid Hotel
HOSPITALITY PROPERTIES - Sunway Pyramid Hotel Average occupancy rate 90.0% 81.4% 80.0% 71.8% 71.4% 71.4% 70.0% 68.1% 60.0% 56.8% 50.0% Ju n-15 Ju n-16 Ju n-17 Ju n-18 YTD 4Q YTD 4Q 2019 2018 Note 1: The hotel properties are under 10-year master leases. The master lease of Sunway Pyramid Hotel is exp
Slide 50: Hospitality Properties - Sunway Clio Hotel
HOSPITALITY PROPERTIES - Sunway Clio Hotel Average occupancy rate 80.0% 74.4% 72.3% 71.5% 71.5% 69.9% 70.0% 60.0% 50.0% Ju n-16 Ju n-17 Ju n-18 YTD 4Q YTD 4Q 2019 2018 Note 1: The hotel properties are under 10-year master leases. The master lease of Sunway Clio Hotel is expiring in February 2028. Re
Slide 51: Hospitality Properties - Sunway Hotel Seberang Jaya
HOSPITALITY PROPERTIES –Sunway Hotel Seberang Jaya Average occupancy rate 80.0% 76.4% 76.4% 74.7% 75.0% 71.1% 69.6% 70.0% 65.5% 65.0% 60.0% Ju n-15 Ju n-16 Ju n-17 Ju n-18 YTD 4Q YTD 4Q 2019 2018 Note 1: The hotel properties are under 10-year master leases. The master lease of Sunway Hotel Seberang
Slide 52: Hospitality Properties - Sunway Putra Hotel
HOSPITALITY PROPERTIES - Sunway Putra Hotel Average occupancy rate 80.0% 72.8% 72.8% 68.2% 62.4% 60.0% 50.2% 40.0% 28.8% 20.0% 0.0% Ju n-15 Ju n-16 Ju n-17 Ju n-18 YTD 4Q YTD 4Q 2019 2018 Note 1: The hotel properties are under 10-year master leases. The master lease of Sunway Putra Hotel is expiring
Slide 53: Hospitality Properties - Sunway Hotel Georgetown
HOSPITALITY PROPERTIES – Sunway Hotel Georgetown Average occupancy rate 100.0% 91.8% 91.8% 90.0% 87.7% 84.5% 80.0% 74.0% 70.0% 70.0% 60.0% Ju n-15 Ju n-16 Ju n-17 Ju n-18 YTD 4Q YTD 4Q 2019 2018 Note 1: The hotel properties are under 10-year master leases. The master lease of Sunway Hotel Georgetown
Slide 54: Office Properties - Menara Sunway
OFFICE PROPERTIES - Menara Sunway Average occupancy rate Projected lease expiry schedule 100.0% 100.0% 97.1% 94.8% 80.0% 95.0% 93.8% 93.8% 92.1% 89.3% 60.0% 90.0% 85.0% 40.0% 80.0% 20.0% 15.1% 9.3% 70.5% 75.0% 0.0% Jun-15 Jun-16 Jun-17 Jun-18 YTD 4Q YTD 4Q FY2020 FY2021 FY2022 2019 2018 The average
Slide 55: Office Properties - Sunway Tower
OFFICE PROPERTIES - Sunway Tower Average occupancy rate Projected lease expiry schedule 18.0% 22.0% 15.0% 21.0% 21.0% 21.0% 20.7% 12.0% 20.1% 9.0% 20.0% 19.6% 6.0% 19.0% 3.0% 4.1% 10.7% 8.2% 18.0% 0.0% Jun-16 Jun-17 Jun-18 YTD 4Q YTD 4Q FY2020 FY2021 FY2022 2019 2018 The average occupancy rate for S
Slide 56: Office Properties - Sunway Putra Tower
OFFICE PROPERTIES - Sunway Putra Tower Average occupancy rate Projected lease expiry schedule 40.0% 100.0% 82.0% 80.0% 30.0% 60.0% 56.0% 56.0% 52.8% 20.0% 40.0% 36.6% 26.4% 10.0% 20.0% 20.9% 39.7% 25.0% 0.0% 0.0% Jun-15 Jun-16 Jun-17 Jun-18 YTD 4Q YTD 4Q FY2020 FY2021 FY2022 2019 2018 The average oc
Slide 57: Office Properties - Wisma Sunway
OFFICE PROPERTIES - Wisma Sunway Average occupancy rate Projected lease expiry schedule 50.0% 100.0% 94.1% 89.8% 90.1% 40.0% 90.0% 86.9% 80.0% 78.3% 78.3% 30.0% 70.0% 20.0% 60.0% 10.0% 21.7% 30.8% 47.6% 50.0% 0.0% Jun-15 Jun-16 Jun-17 Jun-18 YTD 4Q YTD 4Q FY2020 FY2021 FY2022 2019 2018 The average o
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