Sunway Real Estate Investment Trust · MYX:SUNREIT
Sunway Real Estate Investment Trust — Q1 FY2014 Earnings Presentation
54 slides from Sunway Real Estate Investment Trust's earnings presentation, Oct 29, 2013
Slide 1: Sunway REIT Financial Results 1st Quarter Ended 30 September 2013
Sunway REIT Financial Results 1 st Quarter Ended 30 September 2013 (FYE 30 June 2014) Announcement Date: 29 October 2013
Slide 2: Disclaimer
Disclaimer This presentation may contain certain forward looking statements due to a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions; interest rate trends; cost of capital and capital avail
Slide 3: Table of Contents
Table of Contents 1. Highlights & Key Updates 2. 1Q 2014 Financial Results 3. 1Q 2014 Portfolio Performance 4. 1Q 2014 Property Performance 5. Market Outlook 6. Investor Relations Driving values through sustainable growth 3
Slide 4: 1. Highlights & Key Updates
1. Highlights & Key Updates Driving values through sustainable growth 4
Slide 5: Distribution Details
Distribution Details Dividend Distribution Details Distribution Period 1 July 2013 - 30 September 2013 1 Distribution per Unit (DPU) (sen) 2.00 Notice of Entitlement 29 October 2013 Ex-Dividend Date 12 November 2013 Book Closure Date 14 November 2013 Payment Date 28 November 2013 1 Proposed income d
Slide 6: Financial Highlights
Financial Highlights Highlights 1Q 2014 1Q 2013 Change % 1 No. of Properties 12 11 9.1% Property Value (RM'billion) 5.203 4.638 12.2% No. of Units in Circulation 2,921,426,900 2,698,647,600 8.3% Unit Price as at 30 Sep (RM) 1.42 1.45 -2.1% Market Capitalisation (RM'billion) 4.148 3.913 6.0% Net Asse
Slide 7: Financial Highlights (Cont'd)
Financial Highlights (Cont’d) Gross Revenue Net Property Income 100.0 140.0 2 5.8% 1 120.0 0.4% 80.0 77.1 72.9 100.0 100.2 99.8 60.0 80.0 60.0 40.0 40.0 20.0 20.0 - - 1Q 1Q 2014 2013 2014 2013 1 Gross Revenue grew marginally at 0.4% despite loss of income contribution from Sunw ay Putra Mall w hich
Slide 8: Financial Highlights (Cont'd)
Financial Highlights (Cont’d) Income Before Taxation (Realised) DPU 80.0 3.00 2 6.5% 1 -1.5% 2.50 60.0 55.4 2.00 52.0 2.00 2.03 40.0 1.50 1.00 20.0 0.50 - - 1Q 1Q 2014 2013 2014 2013 1 Income Before Taxation increased by 6.5% or RM3.4 million, primarily at t ribut able to t he new income cont ribut
Slide 9: Key Updates
Key Updates 1) Variation to the Master Lease Agreement dated 9 October 2012 (“MLA”) in relation to Sunway Medical Centre Property (“SunMed Property”) As announced on 7 August 2013, the Manager, Lessor and Lessee have agreed to the proposed renovation w orks to Level 4 (Tow er Block A) and Level 5
Slide 10: Key Updates (Cont'd)
Key Updates (Cont’d) 1) Variation to the Master Lease Agreement dated 9 October 2012 (“MLA”) in relation to Sunway Medical Centre Property (“SunMed Property”) (contd.) The rent shall be increased and w ill be paid to the Lessor from the Completion Date or any other date as may be agreed by the par
Slide 11: Key Updates (Cont'd)
Key Updates (Cont’d) 2) Winding up petition against Metroplex Holdings Sdn Bhd The solicitors for RHB Trustees Berhad (formerly know n as OSK Trustees Berhad) (as trustee of Sunw ay REIT) (“ Trustee” ) and Sunw ay REIT Management Sdn Bhd (“ Manager” ) had on 2 August 2012, issued a section 218 Com
Slide 12: 2. 1Q 2014 Financial Results
2. 1Q 2014 Financial Results Driving values through sustainable growth 12
Slide 13: Statement of Comprehensive Income – Consolidated
Statement of Comprehensive Income – Consolidated 1Q 2014 1Q 2013 Change YTD 2014 YTD 2013 Change RM'000 RM'000 % RM'000 RM'000 % Gross revenue 100,176 99,772 0.4% 100,176 99,772 0.4% Less : Property operating expenses (23,070) (26,892) -14.2% (23,070) (26,892) -14.2% Net property income 77,106 72,88
Slide 14: Statement of Financial Position – Consolidated
Statement of Financial Position – Consolidated 30.09.13 30.06.13 RM'000 RM'000 ASSETS Non-current assets Plant and equipment 1,398 1,283 Investment properties 5,202,649 5,184,000 Derivative financial instrument 18,546 7,540 5,222,593 5,192,823 Current assets Receivables, deposits and prepayments 18,
Slide 15: Debt Profile
Debt Profile Facility Limit RM'mil RM'mil Loan Maturity Profile (RM'mil) 450.0 Term Loan 310.8 325.7 1 400.0 Commercial Papers/Revolving 350.0 Loans 2 500.0 340.0 300.0 Unrated MTNs 1,000.0 1,000.0 250.0 Total Gross Borrowings 1,665.7 200.0 400.0 400.0 Discount on Commercial Papers - 150.0 340.0 325
Slide 16: 3. 1Q 2014 Portfolio Performance
3. 1Q 2014 Portfolio Performance Driving values through sustainable growth 16
Slide 17: 1Q/YTD 2014 Revenue Contribution
1Q/YTD 2014 Revenue Contribution 1Q/YTD 2014 (RM'mil) 100.2 1Q/YTD 2013 (RM'mil) 99.8 Retail Hotel Office Others 70.0 60.3 1 58.1 60.0 50.0 40.0 30.0 20.0 8.5 2 7.5 6.5 6.8 4 8.3 7 10.0 5.1 4 5.7 4.3 4.1 4.2 3.9 4.8 1.2 1.2 0.2 3 0.95 0.3 1.5 6 2.0 2.4 2.2 - - Sunway Sunway SCI Sunway Sunway Pyramid
Slide 18: 1Q/YTD 2014 Revenue Contribution (Cont'd)
1Q/YTD 2014 Revenue Contribution (Cont’d) By sector Others By property Office 4.8% 10.9% Sunway Sunway Medical Putra Tower Centre Hotel Sunway Tower 2.4% 4.8% 14.3% 4.2% Menara Sunway Retail 4.3% 70.0% Sunway Putra Hotel 1.5% Sunway Hotel Seberang Jaya Pyramid 0.9% Tower Hotel 5.1% By location Sunwa
Slide 19: 1Q/YTD 2014 NPI Contribution
1Q/YTD 2014 NPI Contribution NPI Margin 1Q/YTD 2014 (RM'mil) 77.1 76.9% 1Q/YTD 2013 (RM'mil) 72.9 73.0% Retail Hotel Office Others 45.0 35.0 25.0 15.0 5.0 (5.0) (15.0) Sunway Sunway Sunway Sunway Sunway SCI Sunway Pyramid Hotel Sunway Menara Sunway Sunway Resort Hotel Medical Pyramid Carnival Hyperm
Slide 20: 1Q/YTD 2014 NPI Contribution (Cont'd)
1Q/YTD 2014 NPI Contribution (Cont’d) By sector Others By property Office 6.2% 9.6% Sunway Medical Sunway Centre Putra Tower 6.2% Hotel Sunway Tower 1.8% 17.5% 3.7% Menara Sunway Retail 4.0% 66.7% Sunway Putra Hotel 1.4% Sunway Hotel Seberang Jaya Pyramid 1.2% Tower Hotel 6.4% By location Sunway Pyr
Slide 21: Resilient Income Stream
RESILIENT INCOME STREAM Well spread-out lease expiry profile and diverse tenant base WALE 1 as at 30 September 2013 – 2.6 years Top 10 tenants comprise approximately 17.4% Projected tenancy expiry of portfolio 2 Top 10 tenants 60.0% Total Top 10 Tenants 17.4% 56.3% Ranhill Worley Parsons Sdn Bhd 4.6
Slide 22: 4. 1Q 2014 Property Performance
4. 1Q 2014 Property Performance Driving values through sustainable growth 22
Slide 23: Retail Properties: Sunway Pyramid Shopping Mall
RETAIL PROPERTIES SUNWAY PYRAMID SHOPPING MALL Historical occupancy rate Projected lease expiry schedule Average occupancy rate 40% 35% 100.0% 99.3% 99.2% 98.5% 98.6% 98.3% 30% 97.9% 97.0% 25% 95.0% 20% 90.0% 15% 85.0% 10% 5% 80.0% 38.2% 15.4% 21.2% 20.6% 1.4% 0% 75.0% FY2014 FY2015 FY2016 FY2017 Mo
Slide 24: Retail Properties: Sunway Pyramid Shopping Mall (Cont'd)
RETAIL PROPERTIES SUNWAY PYRAMID SHOPPING MALL (Cont’d) Tenant mix Top 10 tenants Total Top 10 Tenants 12.8% 21.0% Aeon Co (M) Bhd 2.4% Parkson Corporation Sdn Bhd 1.9% 37.7% TGV Cinemas Sdn Bhd 1.7% 6.6% Sunway Resort Hotel Sdn Bhd 1.3% 4.5% (Convention Centre) Pyramid Bowl Sdn Bhd 1.0% 5.6% 4.9% C
Slide 25: Retail Properties: Sunway Carnival Shopping Mall
RETAIL PROPERTIES SUNWAY CARNIVAL SHOPPING MALL Historical occupancy rate Projected lease expiry schedule Average occupancy rate 40% 35% 100.0% 30% 97.4% 95.7% 25% 95.0% 93.6% 93.9% 91.8% 91.2% 20% 90.6% 90.0% 15% 85.0% 10% 5% 80.0% 15.3% 17.0% 25.0% 34.0% 0.2% 0% 75.0% FY2014 FY2015 FY2016 FY2017 M
Slide 26: Retail Properties: Sunway Carnival Shopping Mall (Cont'd)
RETAIL PROPERTIES SUNWAY CARNIVAL SHOPPING MALL (Cont’d) Tenant mix Top 10 tenants Total Top 10 Tenants 25.9% Parkson Corporation Sdn Bhd 11.9% 22.4% 27.6% Sunway Carnival Convention Centre 2.6% Life Habitat Sdn Bhd 2.0% 4.6% CYC Sega Leisure World (M) Sdn Bhd 1.5% 9.4% Apex Pal (M) Sdn Bhd 1.5% 17.
Slide 27: Retail Properties: Suncity Ipoh Hypermarket
RETAIL PROPERTIES SUNCITY IPOH HYPERMARKET Historical occupancy rate Average occupancy rate 100% 100% 100% 100% 100% 100% 100% 100% 95% 90% 85% 80% 75% Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 YTD YTD 1Q 1Q 2014 2013 Suncity Ipoh Hypermarket is tenanted to a single tenant, a major hypermarket and retailer
Slide 28: Hospitality Properties: Sunway Resort Hotel & Spa
HOSPITALITY PROPERTIES SUNWAY RESORT HOTEL & SPA Historical occupancy rate Average occupancy rate Average occupancy rate (%) 75.0% 80.0% 76.0% 72.4% 72.7% 71.9% 75.0% 71.3% 72.4% 70.8% 69.4% 69.5% 66.7% 70.0% 70.0% 65.0% 61.0% 60.0% 65.0% 55.0% 50.0% 60.0% Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 YTD 1Q 2
Slide 29: Hospitality Properties: Pyramid Tower Hotel
HOSPITALITY PROPERTIES PYRAMID TOWER HOTEL Historical occupancy rate Average occupancy rate (%) Average occupancy rate 85.0% 83.1% 85.0% 81.3% 80.9% 82.6% 78.8% 78.7% 80.0% 76.0% 80.0% 78.1% 77.9% 75.0% 76.0% 75.8% 70.0% 75.0% 65.0% 60.0% 70.0% Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 YTD 1Q 2014 65.0% Av
Slide 30: Hospitality Properties: Sunway Hotel Seberang Jaya
HOSPITALITY PROPERTIES SUNWAY HOTEL SEBERANG JAYA Historical occupancy rate Average occupancy rate (%) Average occupancy rate 80.0% 90.0% 78.8% 80.0% 77.0% 80.0% 70.2% 70.0% 65.8% 70.0% 57.8% 60.0% 51.6% 60.0% 57.8% 50.0% 40.0% 49.5% 50.0% 46.3% Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 YTD 1Q 44.8% 2014 4
Slide 31: Hospitality Properties: Sunway Putra Hotel
HOSPITALITY PROPERTIES SUNWAY PUTRA HOTEL Historical occupancy rate Average occupancy rate (%) Average occupancy rate 80.0% 70.0% 60.2% 59.0% 60.0% 70.5% 50.0% 43.8% 70.0% 40.0% 30.0% 60.0% 57.9% 57.0% 55.4% 20.0% 10.0% 50.0% 0.0% 43.8% Jun-12 * Jun-13 YTD 1Q 2014 40.0% Avg occupancy rate (%) Custom
Slide 32: Office Properties: Menara Sunway
OFFICE PROPERTIES MENARA SUNWAY Historical occupancy rate Projected lease expiry schedule Average occupancy rate 60% 50% 99.7% 99.4% 100.0% 98.5% 98.9% 98.5% 97.3% 97.7% 40% 95.0% 30% 90.0% 20% 85.0% 10% 80.0% 54.0% 19.5% 17.7% 7.3% 0% 75.0% FY2014 FY2015 FY2016 FY2017 Jun-09 Jun-10 Jun-11 Jun-12 Ju
Slide 33: Office Properties: Menara Sunway (Cont'd)
OFFICE PROPERTIES MENARA SUNWAY (Cont’d) Tenant mix Top 10 tenants 1.7% 1.7% Total Top 10 Tenants 81.2% 7.4% 2.8% 2.8% Sunway Integrated Properties 16.1% 26.5% Sunway Management Sdn Bhd 14.9% 8.6% Maxis Mobile Sdn Bhd 14.1% Sunway Construction Sdn Bhd 9.1% 11.9% Sunway Shared Services Sdn Bhd 8.4% 2
Slide 34: Office Properties: Sunway Tower
OFFICE PROPERTIES SUNWAY TOWER Historical occupancy rate Projected lease expiry schedule Average occupancy rate 90% 80% 70% 100.0% 97.0% 95.6% 93.5% 60% 95.0% 90.0% 88.3% 50% 85.0% 83.0% 40% 81.8% 80.0% 30% 75.0% 20% 70.0% 10% 67.1% 0.5% 85.2% 2.6% 65.0% 0% FY2014 FY2015 FY2016 60.0% Jun-09 Jun-10 J
Slide 35: Office Properties: Sunway Tower (Cont'd)
OFFICE PROPERTIES SUNWAY TOWER (Cont’d) Tenant mix Top 10 tenants 2.8% 2.0% 2.3% 2.7% Total Top 10 Tenants 99.7% 1.6% Ranhill Worley Parsons Sdn Bhd 84.0% Intecsea Sdn Bhd 4.6% Royal Danish Embassy 2.8% ACCA Malaysia Sdn Bhd 2.7% WRP Asia Pacific Sdn Bhd 2.0% Zhuojian Associates S/B 1.6% 88.6% San F
Slide 36: Office Properties: Sunway Putra Tower
OFFICE PROPERTIES SUNWAY PUTRA TOWER Historical occupancy rate Projected lease expiry schedule Average occupancy rate 70% 60% 100.0% 98.7% 50% 95.0% 40% 90.0% 85.2% 30% 85.0% 79.6% 80.0% 78.0% 20% 75.0% 73.1% 10% 70.0% 64.4% 3.4% 5.3% 0% FY2014 FY2015 FY2016 65.0% Jun-11 Jun-12 Jun-13 YTD 1Q YTD 1Q
Slide 37: Office Properties: Sunway Putra Tower (Cont'd)
OFFICE PROPERTIES SUNWAY PUTRA TOWER (Cont’d) Tenant mix Top 10 tenants 1.9% 0.9% 3.6% Total Top 10 Tenants 98.6% 4.1% 0.8% Suruhanjaya Koperasi Malaysia 65.0% Kementerian Perdagangan Dalam 18.3% Negeri Koperasi Suruhanjaya Syarikat Malaysia 4.7% Encore Media Sdn Bhd 2.5% Raffcomm Sdn Bhd 2.1% Chini
Slide 38: 5. Market Outlook
5. Market Outlook Driving values through sustainable growth 38
Slide 39: General Outlook
General Outlook o The Malaysian economy expanded by 4.2% in 1H2013 supported by domestic demand amidst continuous w eakness in exports on the back of mixed global economic landscape. o Bank Negara Malaysia (“ BNM” ) has revised dow nw ards the Gross Domestic Products (“ GDP” ) forecast for CY2013 to
Slide 40: General Outlook (Cont'd)
General Outlook (Cont’d) o Despite the Manager’ s endeavour to maintain distribution per unit (“ DPU” ) for FY2014 not w ithstanding the closure of Sunw ay Putra Mall, the Manager is of the view that DPU may be low er due to the softer outlook for the hotel and office segments. o The Manager is comm
Slide 41: Retail
Retail o According to Retail Group Malaysia (“ RGM” ), retail sales in Malaysia are expected to grow at a faster pace of 6.4% to RM94.4 billion from 5.5% recorded in 2012, underpinned by domestic demand. o On the supply side, Cheras Sentral Shopping Mall (estimated NLA of 500,000 sq. ft.), Nu Sentra
Slide 42: Retail (Cont'd)
Retail (Cont’d) o Sunw ay Pyramid Shopping Mall continued to attract renow n international tenants into the mall such as Thomas Sabo, Sw arovski Crystal, Armani Exchange and soon to be opened Sephora, Victoria Secret, H&M and TWG Tea Company. There w ill be ongoing efforts to continuously refresh an
Slide 43: Hotel
Hotel o Tourist arrivals in 1HCY2013 has recorded a grow th of 7.9% y-o-y to 12.56 million. Tourism activities is likely to pick up further in 2HCY2013 in view of the summer break for the Middle Eastern Market and year end holiday season to achieve The Ministry of Tourism’ s targets tourist arrivals
Slide 44: Hotel (Cont'd)
Hotel (Cont’d) o The performance of Sunway Putra Hotel was adversely affected by the ongoing major refurbishment at the adjoining Sunway Putra Mall. As a result, the average occupancy rate has dropped to 43.8% in 1Q2014 versus 55.4% in 1Q2013. Similarly, average daily rates have slipped 3.2% compare
Slide 45: Office
Office o For the 1H2013, the cumulative supply of purpose built office space in KL City remained unchanged at 48.3 million sq. ft. w hile KL City Fringe recorded a 2.1 million sq. ft. increase. Despite the subdued performance and cautious outlook, the Kuala Lumpur office market continues to display
Slide 46: New Tenants at Sunway Pyramid Shopping Mall
New Tenants at Sunway Pyramid Shopping Mall DKNY Jeans Armani Exchange Driving values through sustainable growth 46
Slide 47: New Tenants at Sunway Pyramid Shopping Mall
New Tenants at Sunway Pyramid Shopping Mall H.E. by MANGO Warehouse Driving values through sustainable growth 47
Slide 48: New Tenants at Sunway Pyramid Shopping Mall
New Tenants at Sunway Pyramid Shopping Mall Swarovski Crystal Thomas Sabo Driving values through sustainable growth 48
Slide 49: 6. Investor Relations
6. Investor Relations Driving values through sustainable growth 49
Slide 50: Unit Price Performance (IPO to September 2013)
Unit Price Performance (IPO to 30 September 2013) Unit Price Performance of Sunway REIT versus Performance Statistics* Benchmarks (8 July 2010 – 30 September 2013) 90.0% Price : RM0.90 (as at 8/7/2010) 80.0% 70.0% 66.6% Closing Price : RM1.42 (as at 30/9/2013) 60.0% Highest Price : RM1.70 50.0% 57.8
Slide 51: Unit Price Performance (1Q2014)
Unit Price Performance (1Q2014) Unit Price Performance of Sunway REIT versus Performance Statistics* Benchmarks (30 June 2013 – 30 September 2013) 5.0% Price : RM1.54 (as at 30/6/2013) -0.3% 0.0% Closing Price : RM1.42 (as at 30/9/2013) Jun-13 Jul-13 Aug-13 Sep-13 Highest Price : RM1.55 -5.0% -3.1%
Slide 52: Unitholders' Composition (as at 30 September 2013)
Unitholders’ Composition (as at 30 September 2013) Individual 9.2% Foreign Sunway 20.2% Berhad 34.5% Domestic 79.8% Institutions 56.3% o Total number of unitholders (as at 30 September 2013) has increased to 9,300 from 7,177 (as at 30 June 2013), representing an increase of 29.6% . o Retail particip
Slide 53: Comparative Yields for Various Assets
Comparative Yields for Various Assets 7.0% 6.23% 2 6.15% 5 6.0% 5.58% 1 5.0% 4.0% 3.77% 3 3.15% 4 3.00% 3.0% 2.0% 1.0% 0.0% Sunway REIT M-REIT 10-Year MGS Fixed Deposit EPF Yield OPR Not e: 1. Dist ribut ion yield based on annualised DPU of 7.93sen f or t he period 1 July 2013 t o 30 Sept ember 2013
Slide 54: Thank You
O _ THANK Y a ¥ ie — ae —— _ a —— — ——— _——_ —— tt _— = —_ —— tt i j ; j | | 7 a
Sunway Real Estate Investment Trust — Q1 FY2014 Earnings Presentation on 6ix