Sunway Real Estate Investment Trust · MYX:SUNREIT
Sunway Real Estate Investment Trust — Q1 FY2020 Earnings Presentation
53 slides from Sunway Real Estate Investment Trust's earnings presentation, Nov 5, 2019
Slide 1: Financial Results First Quarter Ended 30 September 2019
FINANCIAL RESULTS First Quarter Ended 30 September 2019 (FYE 30 June 2020) 5 November 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 (1Q2020) 2. Financial Results (1Q2020) 3. Portfolio Performance (1Q2020) 4. Property Development Activities & Assets Enhancement Initiatives 5. Market Outlook 6. Investor Relations Appendix - Property Performance (1Q2020) Empowering Businesses Curating Exp
Slide 4: Financial Highlights (1Q2020)
FINANCIAL HIGHLIGHTS (1Q2020) 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 July 2019 - 30 Sep 2019 2.50 2.48 Distribution Per Unit (DPU) (sen) 2.50 Notice of Entitlement 5 November 2019 Ex-Dividend Date 19 November 2019 Book Closure Date 20 November 2019 1Q2020 1Q2019 Pay
Slide 6: 5-Year Quarterly DPU
5-Year Quarterly DPU 1Q 2Q 3Q 4Q 9.18 9.19 9.57 9.59 2.15 2.28 2.12 2.27 2.37 2.58 2.37 2.37 2.38 2.25 2.57 2.28 - 2.12 2.27 2.67 2.48 2.50 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 5-Year DPU CAGR Annualised Distribution Yield 2.6% 5.2% (FY2020 based on annualised DPU) (Based on unit price of RM1.92
Slide 7: Financial Highlights – 1Q2020
Financial Highlights – 1Q2020 Highlights 1Q 2020 1Q 2019 No. of Properties 17 16 Property Value (RM'billion) 8.059 7.300 Units in Circulation 2,945,078,000 2,945,078,000 Unit Price as at 30 Sep (RM) 1.92 1.69 Market Capitalisation (RM'billion) 5.655 4.977 Net Asset Value ("NAV") Per Unit (RM) 1.4901
Slide 8: Financial Highlights – 1Q2020 (Cont'd)
Financial Highlights – 1Q2020 (Cont’d) Reported in RM’000 Gross revenue 1Q Gross Revenue for 1Q2020 increased by 2020 155,352 8.1% 8.1% or RM11.6 million compared to 1Q2019 mainly attributable to contribution from the newly acquired Sunway university & college 1Q 143,741 campus and better performanc
Slide 9: Financial Results (1Q2020)
FINANCIAL RESULTS (1Q2020) Empowering Businesses Curating Experiences Enriching Lives 9
Slide 10: Statement of Comprehensive Income – Consolidated
Statement of Comprehensive Income – Consolidated 1Q 2020 1Q 2019 Change RM'000 RM'000 % 1 Interest income for 1Q2020 was lower by RM1.2 million mainly due Gross revenue 155,352 143,741 8.1% to higher investment in money Property operating expenses (36,281) (33,227) 9.2% market instrument and higher
Slide 11: Statement of Financial Position – Consolidated
Statement of Financial Position – Consolidated 30.09.19 30.06.19 30.09.19 30.06.19 (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 Investment properties 8,058,763 8,047,410 Plant and equipment 12,
Slide 12: Statement of Cash Flows – Consolidated
Statement of Cash Flows – Consolidated Cumulative Quarter ended 30.09.2019 30.09.2018 1 Net cash from operating activities for RM'000 RM'000 1Q2020 was RM95.5 million, higher by OPERATING ACTIVITIES RM7.2 million compared to 1Q2019, in Cash receipts from customers 162,467 149,722 line with the highe
Slide 13: Debt Profile as of 30 September 2019
Debt Profile as of 30 September 2019 Facility Limit Amount Maturity Profile (RM'million) RM'million RM'million Revolving Loan (USD100m) 392.3 381.9 1 Commercial Papers (CP) / 3,000.0 1,610.0 2 Revolving Loan (RL) Unrated MTNs 10,000.0 1,200.0 3 1,610.0 Total Gross Borrowings 3,191.9 Unamortised tran
Slide 14: Portfolio Performance (1Q2020)
PORTFOLIO PERFORMANCE (1Q2020) Empowering Businesses Curating Experiences Enriching Lives 14
Slide 15: Revenue & NPI growth in 1Q2020
Revenue & NPI growth in 1Q2020 Reported in RM’million Retail 1% Hotel 5% Office Revenue 1Q2020 105.5 23.7 10.1 1Q2019 104.9 22.6 9.1 12% NPI 1Q2020 75.3 22.0 5.7 3% 1Q2019 77.7 20.5 7% 5.1 11% The retail segment recorded The office segment recorded gross Notes gross revenue of RM105.5 million The ho
Slide 16: Revenue & NPI growth in 1Q2020 (Cont'd)
Revenue & NPI growth in 1Q2020 (Cont’d) Reported in RM’million Services Industrial & Others Overall Revenue 1Q2020 14.5 1.5 155.4 1Q2019 5.8 152% 1.4 10% 143.7 8% NPI 1Q2020 14.5 1.5 119.1 1Q2019 5.8 1.4 10% 110.5 152% 8% The services segment Sunway REIT Industrial - Shah Revenue of the portfolio No
Slide 17: 1Q2020 Revenue Contribution (by Property)
1Q2020 Revenue Contribution (by Property) 1Q 2020 1Q 2019 Variance Change By Property RM'mil RM'mil RM'mil % Sunw ay Pyramid Mall 80.4 80.3 0.1 0.1% Sunw ay Carnival Mall 11.7 11.3 0.4 3.5% SunCity Ipoh Hypermarket 1.1 1.1 - 0.0% Sunw ay Putra Mall 12.3 12.2 0.1 0.8% Sunw ay Resort Hotel & Spa 7.1 4
Slide 18: 1Q2020 NPI and NPI Margin Contribution (by Property)
1Q2020 NPI and NPI Margin Contribution (by Property) NPI NPI Margin 1Q 2020 1Q 2019 Variance Change 1Q 2020 1Q 2019 Variance By Property RM'mil RM'mil RM'mil % % % % Sunway Pyramid Mall 61.2 64.2 (3.0) -4.6% 76.1% 79.9% -3.8% Sunway Carnival Mall 7.3 6.8 0.5 7.0% 62.4% 60.3% 2.1% SunCity Ipoh Hyperm
Slide 19: Key Performance Indicators – YTD 1Q2020
Key Performance Indicators – YTD 1Q2020 Industrial & Retail Hotel Office Services Others Average Occupancy 94% 80% 77% 100% 100% Rates NPI Margin1 71% 93% 56% 100% 100% Empowering Businesses Curating Experiences Enriching Lives 19
Slide 20: Property Development Activities & Asset Enhancement Initiatives (AEI)
PROPERTY DEVELOPMENT ACTIVITIES & ASSET ENHANCEMENT INITIATIVES (AEI) (1Q2020) Empowering Businesses Curating Experiences Enriching Lives 20
Slide 21: 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 74.0 million to 1Q 2020 Duration Approximately 3 years from 3Q 2018 Approximately 350,000 sq ft of addit
Slide 22: Market Outlook (1Q2020)
MARKET OUTLOOK (1Q2020) Empowering Businesses Curating Experiences Enriching Lives 22
Slide 23: General Outlook
General Outlook o In the latest World Economic Outlook issued in October 2019, the International Monetary Fund (IMF) has revised its global growth projection downwards to 3.0% in CY2019 (July 2019 forecast: 3.2%), its lowest level since Global Financial Crisis. The downward adjustment was in line wi
Slide 24: General Outlook
General Outlook o Global monetary policy has shifted to higher level of accommodation, to cushion the impact of moderating global economy. The Federal Reserve trimmed the target range for the federal funds rate to 1.50% to 1.75% with a longer-term target of 2.0%. Aligning with the global monetary st
Slide 25: Retail Segment
Retail Segment o The Malaysian retail industry expanded by 4.5% in 2Q CY2019 compared to the same period in CY2018. The growth came in below the Retail Group Malaysia (RGM)’s projection of 5.5%. Although there was a pick-up in retail sales momentum during the quarter on the back of Hari Raya celebra
Slide 26: Retail Segment
Retail Segment o A total of additional retail space of 2.14 million sq.ft. is expected to come on- stream in 2H CY2019 upon the completion of 5 new retail malls which include retail components within integrated developments. o The outlook for the retail segment remains cautious on the back of contin
Slide 27: Hotel Segment
Hotel Segment o Tourist arrivals in the 1H FY2019 grew by 4.9% y-o-y to 13.4 million with a corresponding growth of 6.8% (RM41.7 billion) in tourist expenditure. The growth was mainly attributable to higher tourist arrivals from main markets such as Singapore (+3.6%), Indonesia (+15.0%), China (6.4%
Slide 28: Hotel Segment
Hotel Segment o The Government has allocated RM1.1 billion to the Ministry, Arts and Culture, including an allocation of RM90 million to drive awareness, promotions and programmes for VM2020 campaign. To amplify the economic benefits of VM2020, the Government introduces a host of tax incentives to t
Slide 29: Office Segment
Office Segment o Total office space in the Klang Valley saw an increase of 3.73 million sq.ft. following the completion of five office buildings in 1H CY2019. Majority of the new supply came from the Tun Razak Exchange (TRX), namely The Exchange 106 and Menara Prudential@TRX. o The fundamental chall
Slide 30: Investor Relations (1Q2020)
INVESTOR RELATIONS (1Q2020) Empowering Businesses Curating Experiences Enriching Lives 30
Slide 31: Unit Price Performance from IPO to YTD 1Q FY2020
Unit Price Performance from IPO to YTD 1Q FY2020 Unit Price Performance of Sunway REIT versus Benchmarks (8 July 2010 – 30 September 2019) 140.0% GPR APREA Composite REIT Index - Malaysia 171.6% 120.0% 100.0% 80.0% Sunway REIT 60.0% 113.3% 40.0% 20.0% FBM KLCI 20.4% 0.0% Sept 2019 Dec 2010 Dec 2011
Slide 32: Unit Price Performance for YTD 1Q FY2020
Unit Price Performance for YTD 1Q FY2020 Unit Price Performance of Sunway REIT versus Benchmarks (30 June 2019 – 30 September 2019) 6.0% Sunway REIT 4.0% 2.7% 2.0% Bursa Malaysia REIT Index 0.0% 0.9% Jun 2019 Jul 2019 Aug 2019 Sep 2019 -2.0% -4.0% FBM KLCI -5.3% -6.0% Performance Statistics (30 June
Slide 33: 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 34: Unitholders' Composition (as at 30 September 2019)
Unitholders’ Composition (as at 30 September 2019) Retail Foreign 5.8% 11.3% Institutions & Sunway Berhad Corporate 40.9% 53.3% Domestic 88.7% September 2019 June 2019 Q-o-Q Change No of unitholders 13,816 12,966 850 (6.6%) Retail unitholders 5.8% 5.7% 0.1% Foreign unitholders 11.3% 11.2% 0.1% Sunwa
Slide 35: Analysts Recommendation (as at September 2019)
Analysts Recommendation (as at 30 September 2019) 6.8 6.8 Target Price as at 30 September 2019 (RM) 5.2 4.5 4.2 4.2 Upside / Downside to unit price as at 30 September 2019 (%) 2.6 2.6 2.10 2.05 2.02 2.00 2.05 2.00 1.97 1.97 1.90 1.90 1.89 1.89 1.80 1.89 (1.0) (1.0) (1.6) (1.6) (1.6) (6.2) UOB Kay Hi
Slide 36: Comparative Yields for Various Assets
Comparative Yields for Various Assets 7.0% 6.44%2 6.15%5 6.0% 5.16%1 5.0% 4.0% 3.32%3 3.09%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 FY2020 DPU of 9.90 sen and unit price as at 30 September 2019
Slide 37: Thank You
THANK YOU Empowering Businesses Curating Experiences Enriching Lives 37
Slide 38: Appendix: Property Performance (1Q2020)
APPENDIX: PROPERTY PERFORMANCE (1Q2020) Empowering Businesses Curating Experiences Enriching Lives 38
Slide 39: Retail Properties - Sunway Pyramid Shopping Mall
RETAIL PROPERTIES - Sunway Pyramid Shopping Mall Average occupancy rate Projected lease expiry schedule 40.0% 100.0% 98.3% 98.9% 98.2% 98.0% 98.2% 97.3% 30.0% 95.0% 90.0% 20.0% 85.0% 10.0% 80.0% 2.1% 33.8% 28.8% 17.3% 14.9% 75.0% 0.0% Jun-16 Jun-17 Jun-18 Jun-19 YTD 1Q YTD 1Q FY2020 FY2021 FY2022 FY
Slide 40: Retail Properties - Sunway Carnival Mall
RETAIL PROPERTIES - Sunway Carnival Mall Average occupancy rate Projected lease expiry schedule 70.0% 100.0% 98.2% 97.6% 97.3% 97.4% 96.2% 60.0% 94.4% 95.0% 50.0% 90.0% 40.0% 30.0% 85.0% 20.0% 80.0% 10.0% 75.0% 66.2% 12.9% 15.3% 0.3% 2.0% 0.0% Jun-16 Jun-17 Jun-18 Jun-19 YTD 1Q YTD 1Q FY2020 FY2021
Slide 41: 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% Jun-16 Jun-17 Jun-18 Jun-19 YTD 1Q YTD 1Q 2020 2019 SunCity Ipoh Hypermarket is currently leased to a single tenant, a major hypermarket and retailer chain operating under the “
Slide 42: 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% 89.1% 90.8% 86.3% 50.0% 80.0% 74.9% 40.0% 60.0% 30.0% 40.0% 20.0% 20.0% 10.0% 11.8% 53.7% 21.2% 1.3% 1.4% 0.0% 0.0% Jun-16 Jun-17 Jun-18 Jun-19 YTD 1Q YTD 1Q FY2020 FY2021 FY2022 FY2
Slide 43: Retail Properties - Sunway Clio Retail
RETAIL PROPERTIES - Sunway Clio Retail Average occupancy rate Projected lease expiry schedule 40.0% 100.0% 89.7% 90.3% 30.0% 80.0% 65.8% 60.0% 49.6% 20.0% 37.6% 40.0% 10.0% 20.0% 3.0% 0.0% 14.8% 30.3% 4.5% Jun-16 Jun-17 Jun-18 Jun-19 YTD 1Q YTD 1Q 0.0% 2020 2019 FY2022 FY2023 Monthly tenancy Note :
Slide 44: Hospitality Properties - Sunway Resort Hotel & Spa
HOSPITALITY PROPERTIES - Sunway Resort Hotel & Spa Average occupancy rate 100.0% 81.2% 81.5% 81.5% 80.0% 73.5% 65.4% 67.6% 60.0% 40.0% 20.0% 0.0% Ju n-16 Ju n-17 Ju n-18 Ju n-19 YTD 1Q YTD 1Q 2020 2019 Note 1: The hotel properties are under 10-year master leases. The master lease of Sunway Resort Ho
Slide 45: Hospitality Properties - Sunway Pyramid Hotel
HOSPITALITY PROPERTIES - Sunway Pyramid Hotel Average occupancy rate 90.0% 82.7% 80.0% 71.8% 71.4% 70.0% 68.1% 66.5% 60.0% 56.8% 50.0% Jun-16 Jun-17 Jun-18 Jun-19 YTD 1Q YTD 1Q 2020 2019 Note 1: The hotel properties are under 10-year master leases. The master lease of Sunway Pyramid Hotel is expirin
Slide 46: Hospitality Properties - Sunway Clio Hotel
HOSPITALITY PROPERTIES - Sunway Clio Hotel Average occupancy rate 80.0% 77.4% 76.6% 74.4% 72.3% 71.5% 70.0% 60.0% 50.0% Jun-17 Jun-18 Jun-19 YTD 1Q YTD 1Q 2020 2019 Note 1: The hotel properties are under 10-year master leases. The master lease of Sunway Clio Hotel is expiring in February 2028. The a
Slide 47: Hospitality Properties - Sunway Hotel Seberang Jaya
HOSPITALITY PROPERTIES - Sunway Hotel Seberang Jaya Average occupancy rate 85.0% 80.6% 80.0% 74.7% 75.0% 71.1% 69.6% 69.6% 70.0% 65.5% 65.0% 60.0% Jun-16 Jun-17 Jun-18 Jun-19 YTD 1Q YTD 1Q 2020 2019 Note 1: The hotel properties are under 10-year master leases. The master lease of Sunway Hotel Sebera
Slide 48: Hospitality Properties - Sunway Putra Hotel
HOSPITALITY PROPERTIES - Sunway Putra Hotel Average occupancy rate 100.0% 80.0% 80.0% 72.8% 68.2% 66.2% 62.4% 60.0% 50.2% 40.0% 20.0% 0.0% Jun-16 Jun-17 Jun-18 Jun-19 YTD 1Q YTD 1Q 2020 2019 Note 1: The hotel properties are under 10-year master leases. The master lease of Sunway Putra Hotel is expir
Slide 49: Hospitality Properties – Sunway Hotel Georgetown
HOSPITALITY PROPERTIES – Sunway Hotel Georgetown Average occupancy rate 100.0% 91.8% 91.2% 90.0% 87.7% 86.0% 84.5% 80.0% 74.0% 70.0% 60.0% Jun-16 Jun-17 Jun-18 Jun-19 YTD 1Q YTD 1Q 2020 2019 Note 1: The hotel properties are under 10-year master leases. The master lease of Sunway Hotel Georgetown is
Slide 50: Office Properties - Menara Sunway
OFFICE PROPERTIES - Menara Sunway Average occupancy rate Projected lease expiry schedule 100.0% 100.0% 95.9% 94.8% 94.8% 80.0% 95.0% 93.8% 92.1% 89.3% 60.0% 90.0% 85.0% 40.0% 80.0% 20.0% 15.1% 12.5% 70.4% 75.0% 0.0% Jun-16 Jun-17 Jun-18 Jun-19 YTD 1Q YTD 1Q FY2020 FY2021 FY2022 2020 2019 The average
Slide 51: Office Properties - Sunway Tower
OFFICE PROPERTIES - Sunway Tower Average occupancy rate Projected lease expiry schedule 18.0% 35.0% 30.4% 15.0% 30.0% 25.0% 12.0% 20.7% 21.0% 20.1% 19.6% 19.0% 20.0% 9.0% 15.0% 6.0% 10.0% 5.0% 3.0% 4.6% 11.1% 15.3% 0.0% 0.0% Jun-16 Jun-17 Jun-18 Jun-19 YTD 1Q YTD 1Q FY2020 FY2021 FY2022 2020 2019 Th
Slide 52: Office Properties - Sunway Putra Tower
OFFICE PROPERTIES - Sunway Putra Tower Average occupancy rate Projected lease expiry schedule 40.0% 100.0% 86.4% 82.0% 78.2% 80.0% 30.0% 60.0% 56.0% 20.0% 40.0% 36.6% 26.4% 10.0% 20.0% 19.9% 40.9% 26.0% 0.0% 0.0% Jun-16 Jun-17 Jun-18 Jun-19 YTD 1Q YTD 1Q FY2020 FY2021 FY2022 2020 2019 The average oc
Slide 53: Office Properties - Wisma Sunway
OFFICE PROPERTIES - Wisma Sunway Projected lease expiry schedule Average occupancy rate 60.0% 100.0% 100.0% 94.1% 50.0% 90.1% 90.0% 86.9% 40.0% 80.0% 78.3% 76.4% 30.0% 70.0% 20.0% 60.0% 10.0% 18.6% 30.8% 50.6% 50.0% 0.0% Jun-16 Jun-17 Jun-18 Jun-19 YTD 1Q YTD 1Q FY2020 FY2021 FY2022 2020 2019 The av
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