Sunway Real Estate Investment Trust · MYX:SUNREIT
Sunway Real Estate Investment Trust — 6Q2021 Earnings Presentation
58 slides from Sunway Real Estate Investment Trust's earnings presentation, Jan 28, 2022
Slide 1: Financial Results Sixth Quarter Ended 31 December 2021
FINANCIAL RESULTS Sixth Quarter Ended 31 December 2021 (FPE 31 December 2021) Date: 28 January 2022
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 (6Q2021) 2. Financial Results (6Q2021) 3. Portfolio Performance (6Q2021) 4. Property Development Activities 5. Market Outlook 6. Investor Relations Appendix - Property Performance (6Q2021) Empowering Businesses • Curating Experiences • Enriching Lives 3
Slide 4: Financial Highlights (6Q2021)
FINANCIAL HIGHLIGHTS (6Q2021) Empowering Businesses • Curating Experiences • Enriching Lives 4
Slide 5: Distribution Per Unit (DPU)
Distribution Per Unit (“DPU”) DPU (sen) Details of Income Distribution Distribution Period 1 July 2021 - 31 December 2021 Distribution Per Unit (DPU) (sen) 2.80 Notice of Entitlement 28 January 2022 Ex-Dividend Date 15 February 2022 Book Closure Date 16 February 2022 Payment Date 25 February 2022 DP
Slide 6: 5-Year DPU
5-Year DPU 9.19 9.57 9.59 7.33 # 6.10 * # # The distribution frequency has been changed from quarterly to semi–annual basis with effect from 3Q FY2020. This represents the DPU for 3Q & 4Q, being the semi–annual period ended 30 June 2020 and 30 June 2021. * This represents the DPU for 5Q & 6Q, being
Slide 7: Financial Highlights – 6Q2021
Financial Highlights – 6Q2021 Oct'21 to Dec'21 Oct'20 to Dec'20 Highlights ("6Q2021") ("2Q2021")^ No. of Properties 18 18 Property Value (RM'billion) 8.738 8.561 Units in Circulation 3,424,807,700 3,424,807,700 Unit Price as at 31 Dec 2021/2020 (RM) 1.41 1.50 Market Capitalisation (RM'billion) 4.829
Slide 8: Financial Highlights – 6Q2021 (Cont'd)
Financial Highlights – 6Q2021 (Cont’d) Reported in RM’000 Gross Revenue for 6Q2021 increased by 64.8% or RM62.0 million compared to 2Q2021 which includes the recognition of unrealised unbilled lease income 1 64.8% receivable amounting to RM19.6 million. Excluding this effect, 6Q2021 revenue was high
Slide 9: Financial Highlights – YTD 6Q2021
Financial Highlights – YTD 6Q2021 The current cumulative financial period is a period of 18 months, made up from 1 July 2020 to 31 December 2021. As such, there are no comparative figures for the preceding year corresponding period. Reported in RM’000 …………………….. 1 675,558 Gross Revenue for YTD 6Q202
Slide 10: Financial Results (6Q2021)
FINANCIAL RESULTS (6Q2021) Empowering Businesses • Curating Experiences • Enriching Lives 10
Slide 11: Statement of Comprehensive Income – Consolidated
Statement of Comprehensive Income – Consolidated The current cumulative financial period is a period of 18 months, made up from 1 July 2020 to 31 December 2021. As such, there are no comparative figure for the preceding year corresponding period. 6Q2021 2Q2021 Change YTD 6Q2021 RM'000 RM'000 % RM'00
Slide 12: Statement of Financial Position – Consolidated
Statement of Financial Position – Consolidated 31.12.2021 30.06.2020 31.12.2021 30.06.2020 (Unaudited) (Restated)^ (Unaudited) (Restated)^ RM'000 RM'000 RM'000 RM'000 ASSETS Non-current assets Units in circulation ('000 units) 3,424,808 2,945,078 Investment properties 8,701,745 1 8,020,233 Investmen
Slide 13: Statement of Financial Position – Consolidated
Statement of Financial Position – Consolidated 1. Investment properties increased by RM681.5 million pursuant to the completion of the acquisition of The Pinnacle Sunway on 20 November 2020 as well as on-going capital expenditure mainly for the expansion of Sunway Carnival Shopping Mall and Sunway R
Slide 14: Statement of Cash Flows – Consolidated
Statement of Cash Flows – Consolidated 1 Net cash from operating activities for YTD 6Q2021 of * RM432.5 million mainly comprise of cash receipt from hotel lessees and tenants, refundable deposits, partially net off by cash paid for operating expenses. 1 2 Net cash used in investing activities for YT
Slide 15: Financing Profile as at 31 December 2021
Financing Profile as at 31 December 2021 Facility Limit Amount RM'million RM'million Revolving Loan (USD) USD95.5million 395.7 1 Commercial Papers (CP) / 3,000.0 1,600.0 2 Revolving Loan (RL) Unrated MTNs 10,000.0 1,410.0 3 Total Gross Borrowings 3,405.7 Unamortised transaction costs (0.3) Total Bor
Slide 16: Portfolio Performance (6Q2021)
PORTFOLIO PERFORMANCE (6Q2021) Empowering Businesses • Curating Experiences • Enriching Lives 16
Slide 17: Revenue & NPI growth in 6Q2021 – Realised
Revenue & NPI growth in 6Q2021 – Realised Reported in RM’million Retail Hotel Office 63% 24% 31% Revenue 6Q2021 92.4 9.8 19.1 2Q2021 56.8 7.9 14.5 NPI 94% 29% 38% 6Q2021 65.8 8.5 12.4 2Q2021 33.9 6.6 9.0 The retail segment recorded gross The hotel segment recorded The office segment recorded gross N
Slide 18: Revenue & NPI growth in 6Q2021 – Realised (Cont'd)
Revenue & NPI growth in 6Q2021 – Realised (Cont’d) Reported in RM’million Services 2% Industrial & Others Overall 44% Revenue 6Q2021 15.3 1.5 138.2 2Q2021 15.0 1.5 95.8 2% NPI 57% 6Q2021 15.3 1.5 103.5 2Q2021 15.0 66.0 1.5 The services segment Sunway REIT Industrial - Shah Revenue of the portfolio N
Slide 19: Revenue & NPI growth in YTD 6Q2021 – Realised
Revenue & NPI growth in YTD 6Q2021 – Realised Reported in RM’million Retail Hotel Office Revenue 404.0 49.8 101.6 YTD 6Q2021 NPI 229.9 40.3 66.8 YTD 6Q2021 The retail segment recorded YTD The hotel segment recorded YTD The office segment recorded YTD Notes 6Q2021 gross revenue of 6Q2021 gross revenu
Slide 20: Revenue & NPI growth in YTD 6Q2021 – Realised (Cont'd)
Revenue & NPI growth in YTD 6Q2021 – Realised (Cont’d) Reported in RM’million Services Industrial & Others Overall Revenue 91.2 9.2 656.0 YTD 6Q2021 1 NPI 91.2 9.2 YTD 6Q2021 437.5 The services segment Sunway REIT Industrial - Shah YTD 6Q2021 revenue of the Notes contributed YTD 6Q2021 revenue Alam
Slide 21: 6Q2021 and YTD 6Q2021 Revenue Contribution (by Property)
6Q2021 and YTD 6Q2021 Revenue Contribution (by Property) YTD 6Q 6Q 2021 2Q 2021 Variance Change 2021 By Property RM'mil RM'mil RM'mil % RM'mil Sunway Pyramid Mall 71.5 38.7 32.8 84.9% 302.1 Sunway Carnival Mall 8.7 9.7 (1.0) -10.4% 45.1 SunCity Ipoh Hypermarket 0.8 0.8 0.0* 1.7% 4.5 Sunway Putra Mal
Slide 22: 6Q2021 NPI and NPI Margin Contribution (by Property)
6Q2021 NPI and NPI Margin Contribution (by Property) NPI NPI Margin 6Q 2021 2Q 2021 Variance Change 6Q 2021 2Q 2021 Variance By Property RM'mil RM'mil RM'mil % % % % Sunway Pyramid Mall 53.7 24.1 29.6 123.0% 75.1% 62.2% 12.8% Sunway Carnival Mall 4.5 6.0 (1.5) -25.1% 51.6% 61.8% -10.2% SunCity Ipoh
Slide 23: YTD 6Q2021 NPI and NPI Margin Contribution (by Property)
YTD 6Q2021 NPI and NPI Margin Contribution (by Property) NPI NPI Margin YTD 6Q 2021 YTD 6Q 2021 By Property RM'mil % Sunway Pyramid Mall 184.7 61.1% Sunway Carnival Mall 21.8 48.5% SunCity Ipoh Hypermarket 4.4 98.6% Sunway Putra Mall 18.9 36.1% Sunway Resort Hotel (2.0) >-100% Sunway Pyramid Hotel 0
Slide 24: Key Performance Indicators – YTD 6Q2021
Key Performance Indicators – YTD 6Q2021 Industrial Retail Hotel Office Services & Others 2 YTD 6Q2021 6Q2021 6Q2021 6Q2021 6Q2021 Average 1 Occupancy 97% 32% 84% 100% 100% Rates NPI Margin 57% 81% 66% 100% 100% Notes: 1. Excludes Sunway Resort Hotel which was closed for phased refurbishment commenci
Slide 25: Property Development Activities (6Q2021)
PROPERTY DEVELOPMENT ACTIVITIES (6Q2021) Empowering Businesses • Curating Experiences • Enriching Lives 25
Slide 26: Property Development Activities
Property Development Activities Expansion of Sunway Carnival Shopping Mall Sunway Resort Hotel Refurbishment Estimated total property development cost RM436.0 million # RM261.0 million (including land) Cummulative cost incurred from initiation RM252.3 million RM120.0 million to YTD 6Q2021 Expected c
Slide 27: General Outlook
General Outlook o The World Bank projected the global economy to grow at a slower pace of 4.1% in CY2022 (CY2021: 5.5%), reflecting the threat from the surge in COVID-19 Omicron variant, continued supply chain strains and asset purchase programme tapering by the Federal Reserve (Fed) and tightening
Slide 28: General Outlook (cont'd)
General Outlook (cont’d) o Headline Consumer Price Index (CPI) increased 3.3% year-on-year (y-o-y) in November 2021, mainly driven by Transport (12.7%) and Housing, Water, Electricity, Gas & Other Fuels (3.4%). Core inflation rose marginally higher by 0.9% in November 2021. For CY2021, headline infl
Slide 29: General Outlook (cont'd)
General Outlook (cont’d) o The Manager observed encouraging business recovery signs pursuant to reopening of all economy sectors as all states in Malaysia transitioned into Phase 4 of the National Recovery Plan (NRP) on 3 January 2022. The recovery was further supported by uplifting of interstate tr
Slide 30: Retail Segment
Retail Segment o The Retail Group Malaysia (RGM) projected 6% growth for retail sales in 2022 on the back of the relaxation movement restrictions, improved consumer spending sentiments, and dissipating COVID-19 pandemic fear. RGM has revised downwards its full-year CY2021 retail sales growth forecas
Slide 31: Retail Segment
Retail Segment o Pursuant to the transition of Malaysia into Phase 4 of NRP, the retail segment has observed encouraging retail footfall and retail sales, lifted by the year-end holiday and festive seasons. The adult population in Malaysia has achieved close to 100% vaccination rate where individual
Slide 32: Hotel Segment
Hotel Segment o Malaysian Association of Hotels (MAH) cited that the 2021 Christmas and New Year holidays saw occupancy rates peaking at approximately 52% with popular domestic holiday destinations performing better than others. MAH has estimated the average hotel occupancy to close below 30% in CY2
Slide 33: Hotel Segment
Hotel Segment o Moving forward, the hotel segment is expected to continue to benefit from the demand for domestic leisure and business travels as well as gradual resumption in MICE activities. Recovery in the domestic economy coupled with ongoing implementation of booster vaccination shots for the g
Slide 34: Office Segment
Office Segment o The transition to Phase 4 of the NRP has resulted in the reopening of all economic sectors with office segment expected to gradually recover as businesses reopen. However, with existing and upcoming supply of office spaces, falling trend of net rents is expected to further compress
Slide 35: Industrial & Others Segment
Industrial & Others Segment o Malaysia’s Industrial Production Index (IPI) rose 9.4% y-o-y in November 2021 attributed to increase in Manufacturing (+11.3%), Electricity (+5.1%) and Mining Index (+3.7%). The rise in manufacturing index was mainly contributed by growth in Electrical & Electronics Pro
Slide 36: Unit Price Performance from IPO to 6Q FP2021
Unit Price Performance from IPO to 6Q FP2021* Unit Price Performance of Sunway REIT versus Benchmarks (8 July 2010 – 31 December 2021) 120.0% 100.0% 80.0% Sunway REIT +56.7% 60.0% FBM Top 100 Index 40.0% +22.9% 20.0% FBM KLCI +19.1% 0.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Pe
Slide 37: Unit Price YTD Performance for FP2021
Unit Price YTD Performance for FP2021* Unit Price Performance of Sunway REIT versus Benchmarks (1 July 2020 – 31 December 2021) 16.0% 12.0% FBM KLCI 4.4% 8.0% 4.0% 0.0% -4.0% Bursa Malaysia REIT Index -8.0% -10.2% -12.0% Sunway REIT -16.0% -12.9% Jun 2020 Sep 2020 Dec 2020 Mar 2021 Jun 2021 Sep 2021
Slide 38: Indices Representation
Indices Representation o FTSE Bursa Malaysia Mid 70 Index o FTSE Bursa Malaysia Emas o FTSE Bursa Malaysia Top 100 Index Index o Bursa Malaysia REIT Index o FTSE ASEAN All-Share Index o FTSE ASEAN Malaysia Index o FTSE ASEAN All-Share ex Developed Index o FTSE4Good Bursa Malaysia Index o GPR APREA C
Slide 39: Unitholders' Composition (as at 31 December 2021)
Unitholders’ Composition (as at 31 December 2021) Foreign Retail 7.3% 6.2% Institutions & Sunway Berhad Corporates 40.9% 52.9% Domestic 92.7% December 2021 September 2021 Q-o-Q Change No of unitholders 29,069 29,049 +20 (0.1%) Retail unitholders 6.2% 6.2% 0.0% Foreign unitholders 7.3% 7.1% 0.2% Sunw
Slide 40: Analysts Recommendation (as at December 2021)
Analysts Recommendation (as at 31 December 2021) 2 17.7 17.0 17.7 Average Consensus Target Price = RM1.50 14.2 9.9 9.9 9.2 8.5 1 5.7 6.4 2.8 2.8 1.66 1.65 1.55 1.66 1.61 1.55 1.54 1.45 1.45 1.40 1.36 1.53 1.49 1.35 1.50 1.30 0 (0.7) (3.5) (4.3) Target Price as at 31 Dec 2021 (RM) Upside / Downside t
Slide 41: Comparative Yields for Various Assets
Comparative Yields for Various Assets 5.11%2 5.20%5 3.60%3 2.88%1 1.71%4 1.75%6 Sunway REIT M-REITs 10-Year MGS Fixed Deposit EPF Yield OPR Note: 1 Distribution yield is computed based on annualised FP2021 DPU of 4.06 sen (annualised based on 18-month DPU of 6.10 sen due to change in Financial Year
Slide 42: Appendix: Property Performance (6Q2021)
APPENDIX: PROPERTY PERFORMANCE (6Q2021) 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 80.0% 70.0% 68.1% 100% 99% 98% 98% 98% 98% 60.0% 95% 50.0% 90% 40.0% 85% 30.0% 20.0% 80% 13.9% 12.4% 10.0% 3.9% 75% 0.0% Jun-17 Jun-18 Jun-19 Jun-20 YTD 6Q FY2022 FY2023 Beyond Monthly 2021 FY2023
Slide 44: Retail Properties – Sunway Carnival Shopping Mall
RETAIL PROPERTIES – Sunway Carnival Shopping Mall Projected lease expiry schedule Average occupancy rate 110.0% 100% 100.0% 95.9% 98% 97% 97% 96% 95% 90.0% 95% 80.0% 90% 70.0% 60.0% 85% 50.0% 80% 40.0% 30.0% 75% 20.0% 70% 10.0% 2.0% 0.1% Jun-17 Jun-18 Jun-19 Jun-20 YTD 6Q 0.0% 2021 FY2022 FY2023 Mon
Slide 45: Retail Properties – SunCity Ipoh Hypermarket
RETAIL PROPERTIES – SunCity Ipoh Hypermarket Average occupancy rate 100% 100% 100% 100% 100% 90% 86% 80% 70% 60% 50% Jun-17 Jun-18 Jun-19 Jun-20 YTD 6Q 2021 SunCity Ipoh Hypermarket replaced its single tenant which ended on 30 April 2020, with new single tenant TF Value-Mart which commenced on 22 Ju
Slide 46: Retail Properties – Sunway Putra Mall
RETAIL PROPERTIES – Sunway Putra Mall Average occupancy rate Projected lease expiry schedule 40.0% 100% 93% 93% 35.7% 91% 90% 86% 31.9% 80% 30.0% 22.3% 60% 20.0% 40% 10.0% 20% 3.7% 0% 0.0% Jun-17 Jun-18 Jun-19 Jun-20 YTD 6Q FY2022 FY2023 Beyond Monthly 2021 FY2023 tenancy YTD 6Q2021 average occupanc
Slide 47: Retail Properties – Sunway Clio Retail
RETAIL PROPERTIES – Sunway Clio Retail Average occupancy rate Projected lease expiry schedule 90.0% 83.9% 100% 90% 90% 80.0% 70.0% 80% 72% 66% 60.0% 60% 50.0% 38% 40.0% 40% 30.0% 20% 20.0% 10.0% 0% 2.0% Jun-17 Jun-18 Jun-19 Jun-20 YTD 6Q 0.0% 2021 FY2022 Beyond FY2023 Note : The acquisition was comp
Slide 48: Hospitality Properties – Sunway Resort Hotel
HOSPITALITY PROPERTIES – Sunway Resort Hotel Average occupancy rate 100% 82% 80% 74% 65% 60% 49% 40% 20% 0% Jun-17 Jun-18 Jun-19 Jun-20 YTD 6Q 2021 Note 1: The hotel properties are under 10-year master leases. The master lease of Sunway Resort Hotel was renewed from July 2020 to July 2030. Note 2: S
Slide 49: Hospitality Properties – Sunway Pyramid Hotel
HOSPITALITY PROPERTIES – Sunway Pyramid Hotel Average occupancy rate 100% 80% 71% 68% 57% 59% 60% 40% 29% 20% 0% Jun-17 Jun-18 Jun-19 Jun-20 YTD 6Q 2021 Note: The hotel properties are under 10-year master leases. The master lease of Sunway Pyramid Hotel was renewed from July 2020 to July 2030. YTD 6
Slide 50: Hospitality Properties – Sunway Clio Hotel
HOSPITALITY PROPERTIES – Sunway Clio Hotel Average occupancy rate 100% 80% 72% 74% 71% 58% 60% 42% 40% 20% 0% Jun-17 Jun-18 Jun-19 Jun-20 YTD 6Q 2021 Note: The hotel properties are under 10-year master leases. The master lease of Sunway Clio Hotel is expiring in February 2028. YTD 6Q2021 average occ
Slide 51: Hospitality Properties – Sunway Hotel Seberang Jaya
HOSPITALITY PROPERTIES – Sunway Hotel Seberang Jaya Average occupancy rate 100% 80% 76% 75% 71% 60% 51% 43% 40% 20% 0% Jun-17 Jun-18 Jun-19 Jun-20 YTD 6Q 2021 Note: The hotel properties are under 10-year master leases. The master lease of Sunway Hotel Seberang Jaya was renewed from July 2020 to July
Slide 52: Hospitality Properties – Sunway Putra Hotel
HOSPITALITY PROPERTIES – Sunway Putra Hotel Average occupancy rate 80% 73% 68% 62% 60% 48% 40% 29% 20% 0% Jun-17 Jun-18 Jun-19 Jun-20 YTD 6Q 2021 Note: The hotel properties are under 10-year master leases. The master lease of Sunway Putra Hotel was renewed from September 2021 to September 2031. YTD
Slide 53: Hospitality Properties – Sunway Hotel Georgetown
HOSPITALITY PROPERTIES – Sunway Hotel Georgetown Average occupancy rate 100% 92% 88% 85% 80% 60% 53% 40% 20% 20% 0% Jun-17 Jun-18 Jun-19 Jun-20 YTD 6Q 2021 Note: The hotel properties are under 10-year master leases. The master lease of Sunway Hotel Georgetown is expiring in Jan 2025 YTD 6Q2021 avera
Slide 54: Office Properties – Menara Sunway
OFFICE PROPERTIES – Menara Sunway Average occupancy rate Projected lease expiry schedule 70.0% 100% 97% 61.7% 97% 60.0% 95% 95% 94% 92% 50.0% 90% 40.0% 85% 30.0% 23.3% 20.0% 80% 11.6% 10.0% 75% Jun-17 Jun-18 Jun-19 Jun-20 YTD 6Q 0.0% 2021 FY2022 FY2023 Beyond FY2023 YTD 6Q2021 average occupancy rate
Slide 55: Office Properties – Sunway Tower
OFFICE PROPERTIES – Sunway Tower Projected lease expiry schedule Average occupancy rate 18.0% 40% 16.0% 33% 32% 15.0% 30% 12.0% 21% 21% 20% 20% 9.0% 6.0% 5.4% 10% 3.0% 1.1% 0% Jun-17 Jun-18 Jun-19 Jun-20 YTD 6Q 0.0% 2021 FY2022 FY2023 Beyond FY2023 YTD 6Q2021 average occupancy rate at Sunway Tower d
Slide 56: Office Properties – Sunway Putra Tower
OFFICE PROPERTIES – Sunway Putra Tower Projected lease expiry schedule Average occupancy rate 40.0% 100% 35.4% 34.4% 86% 83% 82% 80% 30.0% 60% 56% 20.0% 40% 37% 13.2% 10.0% 20% 0% 0.0% Jun-17 Jun-18 Jun-19 Jun-20 YTD 6Q FY2022 FY2023 Beyond FY2023 2021 YTD 6Q2021 average occupancy rate at Sunway Put
Slide 57: Office Properties – Wisma Sunway
OFFICE PROPERTIES – Wisma Sunway Average occupancy rate Projected lease expiry schedule 100% 100% 100% 94% 78.4% 80.0% 87% 70.0% 78% 80% 60.0% 60% 50.0% 40.0% 40% 30.0% 18.6% 20.0% 20% 10.0% 3.0% 0% 0.0% Jun-17 Jun-18 Jun-19 Jun-20 YTD 6Q FY2022 FY2023 Beyond FY2023 2021 YTD 6Q2021 average occupancy
Slide 58: Office Properties – The Pinnacle Sunway
OFFICE PROPERTIES – The Pinnacle Sunway Average occupancy rate Projected lease expiry schedule 97% 97% 99% 100% 97% 100% 50.0% 40.1% 80% 38.9% 40.0% 60% 30.0% 40% 20.0% 17.1% 20% 10.0% 0% Jun-17 Jun-18 Jun-19 Jun-20 YTD 6Q 0.0% 2021 FY2022 FY2023 Beyond FY2023 Note : The acquisition was completed on
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