Sunway Real Estate Investment Trust · MYX:SUNREIT
Sunway Real Estate Investment Trust — Credit Suisse ASEAN Conference 2013
66 slides from Sunway Real Estate Investment Trust's conference presentation, Jan 11, 2013
Slide 1: Sunway REIT Corporate Presentation for Credit Suisse ASEAN Conference 2013
Sunway REIT Corporate Presentation for Credit Suisse ASEAN Conference 2013 11 January 2013
Slide 2: Disclaimer
STRICTLY PRIVATE & CONFIDENTIAL 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 b
Slide 3: Table of Contents
STRICTLY PRIVATE & CONFIDENTIAL Table of Contents 1. Background 2. Financial Highlights 3. Growth Driver 1: Organic Growth 4. Growth Driver 2: Acquisition Growth 5. Growth Driver 3: Asset Turnaround 6. Capital Management 7. The Largest REIT in Malaysia 8. Conclusion Appendices 2
Slide 4: 1. Background
STRICTLY PRIVATE & CONFIDENTIAL 1. Background 3
Slide 5: Largest REIT in Malaysia
STRICTLY PRIVATE & CONFIDENTIAL Largest REIT in Malaysia Others Property Value Office 6% 9% RM 4.95 billion^ Portfolio By Gross Floor Area Hotel Property Value Retail 63% 22% 11,585,607 sq. ft^ Market Capitalisation RM 4.19 billion* ^ As at 31 December 2012. * As at 31 December 2012 and closing pric
Slide 6: Largest REIT in Malaysia
STRICTLY PRIVATE & CONFIDENTIAL Largest REIT in Malaysia Perak 1% Penang Office 6% 10% Kuala Lumpur 16% Hotel Portfolio by 21% Portfolio by Geographical NPI Contribution2 Diversification1 Retail 69% Selangor 77% Note: 1 Based on asset values as at 31 Dec 2012 2 Based on NPI as at 30 Sept 2012 5
Slide 7: Enlarged Sunway REIT portfolio
STRICTLY PRIVATE & CONFIDENTIAL Enlarged Sunway REIT portfolio Largest Malaysian REIT by asset value with an attractive and diversified portfolio Total Appraised Value: RM4,948 million Perlis Sunway Resort City (“SRC”) Pusat Bandar Seberang Jaya Kedah Sunway Resort Sunway Carnival Sunway Hotel Pyram
Slide 8: Awards and Recognitions
STRICTLY PRIVATE & CONFIDENTIAL Awards and Recognitions APREA Best Practices Award 2012 (Emerging Markets Category) Sunway REIT was also awarded the following APREA Merit Awards 2012 - 1. Best Country Submission –Malaysia 2. Emerging Markets – Corporate Governance 3. Emerging Markets Portfolio Perfo
Slide 9: 2. Financial Highlights
STRICTLY PRIVATE & CONFIDENTIAL 2. Financial Highlights 8
Slide 10: 1Q2013 Financial Results Highlights
STRICTLY PRIVATE & CONFIDENTIAL 1Q2013 Financial Results Highlights - Healthy results, boosted by lower cost of debt Variance YTD YTD Variance (RM mil) 1Q2013 1Q2012 (%) FY2013 FY2012 (%) Revenue 99.8 95.0 +5.0 99.8 95.0 +5.0 Net Property income 72.9 70.3 +3.7 72.9 70.3 +3.7 Realised Net Income: -In
Slide 11: Key Statistics and Ratio
STRICTLY PRIVATE & CONFIDENTIAL Key Statistics and Ratio Highlights 1Q2013 No. of Units in circulation1 2,700, 625,900 Unit Price (as at 31 December 2012) (RM) 1.55 Net Asset Value (NAV) per unit (RM)1 1.0968 Premium to NAV 41.3% Earnings Per Unit (EPU) (sen)1 1.93 Distribution Per Unit (DPU) (sen)1
Slide 12: 3. Growth Driver 1: Organic Growth
STRICTLY PRIVATE & CONFIDENTIAL 3. Growth Driver 1: Organic Growth 11
Slide 13: Organic Growth
STRICTLY PRIVATE & CONFIDENTIAL Organic Growth - Vibrant township factors enable sustainable asset enhancement opportunities Vibrant and Growing Asset Management Initiatives Asset Enhancement Initiatives Township (AMIs) (AEIs) o Captive market with large o Rental reversion o Increase in NLA populati
Slide 14: The Power of SRC
STRICTLY PRIVATE & CONFIDENTIAL The Power of SRC - One of its kind township assets 13
Slide 15: The Pinnacle
STRICTLY PRIVATE & CONFIDENTIAL The Pinnacle - The only Grade A office in Bandar Sunway with more than 5,000 office population Artist’s impression of The Pinnacle Construction progress photo taken at actual site on 8 Jan 2013 The Pinnacle NLA (sq. ft) Approx 560,000 Floor plates (sq. ft) 23,000 Car
Slide 16: Sunway Pyramid Phase 3
STRICTLY PRIVATE & CONFIDENTIAL Sunway Pyramid Phase 3 - Creating new frontage to OB3 and boosting significant additional footfall to the mall Preliminary Artist’s impression of Sunway Pyramid 3 Future Development Sunway Pyramid 3 Retail NLA (sq. ft) 62,000 No. of rooms 435 Car Parks 760 Retail Hote
Slide 17: New Infrastructure Enhancement within SRC
STRICTLY PRIVATE & CONFIDENTIAL New Infrastructure Enhancement within SRC - Bus Rapid Transit-Sunway Line improving public transportation connectivity o Joint venture with Syarikat Prasarana Berhad under the Public-Private Partnership (“PPP”). o The BRT-Sunway Line will run on dedicated guideways th
Slide 18: New Infrastructure Enhancement within SRC
STRICTLY PRIVATE & CONFIDENTIAL New Infrastructure Enhancement within SRC - Roads upgrading to improve vehicular traffic flow Proposed road upgrading and infrastructure improvement around Bandar Sunway, Subang Jaya and USJ area o Road widening along New Pantai Expressway (NPE) from Sunway Pyramid to
Slide 19: 1Q2013 Rental Reversion
STRICTLY PRIVATE & CONFIDENTIAL 1Q2013 Rental Reversion - Retail assets enjoying strong double-digits rental reversions Note: The hotel properties are under a 10-year hotel master lease (HML). HML for Sunway Resort Hotel & Spa, Pyramid Tower Hotel and Sunway Hotel Seberang Jaya will be due in July 2
Slide 20: Asset Enhancement Initiatives (AEIs)
STRICTLY PRIVATE & CONFIDENTIAL Asset Enhancement Initiatives (AEIs) - Substantial pipeline of ongoing capex over the next 3 years Time FY2012 FY2013 FY2014 FY 2015 SP: Canopy Walk 3 MSW Extension Investment: RM4.0mil Investment: RM4.5mil Est ROI: 20.7% Est ROI: 12.5% SP: Chillers Retrofits Investme
Slide 21: 4. Growth Driver 2: Acquisition Growth
STRICTLY PRIVATE & CONFIDENTIAL 4. Growth Driver 2: Acquisition Growth 20
Slide 22: Investment Strategy
STRICTLY PRIVATE & CONFIDENTIAL Investment Strategy - Asset portfolio to grow to over RM7 billion in 3 years Investment Strategy1 Compatibility High growth Retail and and cities and Large ticket mixed used synergistic to townships in size assets assets Malaysia2 portfolio Foundation of Sustainabilit
Slide 23: Investment Strategy
STRICTLY PRIVATE & CONFIDENTIAL Investment Strategy - Robust acquisition track record July 2010 March 2011 October 2012 5-7 years from IPO Pipeline assets IPO and 3rd party asset acquisitions Initial portfolio of 8 Acquisition of Sunway Putra Acquisition of Sunway Medical assets Place for RM514 mill
Slide 24: Latest acquisition: Sunway Medical Centre
STRICTLY PRIVATE & CONFIDENTIAL Latest acquisition : Sunway Medical Centre - Leveraging the cross-synergies of SRC township Transaction summary – Sunway Medical Centre o Acquisition of Sunway Medical Centre and related assets(1) (“SunMed Property”) for a purchase consideration of RM310 million o Sun
Slide 25: Acquisition enhances Sunway REIT's financial profile
STRICTLY PRIVATE & CONFIDENTIAL Acquisition enhances Sunway REIT’s financial profile and its position as the largest Malaysian REIT in terms of asset value Increased income stability and weighted average lease expiry NAV accretive acquisition(1) (WALE) 2.56 2.09 1.097 1.119 (NAV per unit (RM)) 22% 2
Slide 26: Strong Pipeline Assets
STRICTLY PRIVATE & CONFIDENTIAL Strong Pipeline Assets - Completed assets in vibrant townships SRC Sunway Damansara Sunway University Monash University, Sunway Campus Sunway Giza Shopping Mall Educational institutions with more than 1,467,000 sq. ft. of combined GFA NLA of approximately 98,000 sq. f
Slide 27: Strong Pipeline Assets
STRICTLY PRIVATE & CONFIDENTIAL Strong Pipeline Assets - Under-construction assets to enlarge Sunway REIT's portfolio SRC Kuala Lumpur Sunway Velocity: Artist impression. Shopping Mall with NLA of more than 800,000 sq. ft. and more than 2,000 car parks The Pinnacle: Artist Sunway Pyramid 3: impressi
Slide 28: 5. Growth Driver 3: Asset Turnaround
STRICTLY PRIVATE & CONFIDENTIAL 5. Growth Driver 3: Asset Turnaround 27
Slide 29: Sunway Putra Place, Kuala Lumpur
STRICTLY PRIVATE & CONFIDENTIAL Sunway Putra Place, Kuala Lumpur - A gem in the making 28
Slide 30: Strategic location with close proximity to public transportation
STRATEGIC LOCATION WITH CLOSE PROXIMITY TO PUBLIC TRANSPORTATION ROAD, RAIL & RIVER STRICTLY PRIVATE ACCESS & CONFIDENTIAL RIVER OF LIFE Bistari Condominium Putra World Trade Center Serviced Apartments Best Western car park Seri Pacific Hotel SITE LRT Villa Putera KTM Villa Puteri BUKIT TUNKU CHOW K
Slide 31: Site surrounding zoning
STRICTLY PRIVATE & CONFIDENTIAL NEW DEVELOPMENT PLAZA DAMAS 7.5km 2.5km 5km HARTAMAS SITE SHOPPING CENTRE KLCC PAVILION BUKIT BITANG DAMANSARA BANSAR CITY SHOPPING CENTRE TIMES SQUARE SURROUNDING SITE ZONING Upper middle residential area Up market residential area Government land Retail Centre 30 30
Slide 32: Market Positioning
STRICTLY PRIVATE & CONFIDENTIAL Market Positioning - To position as urban-chic mall Mall • Lifestyle urban-chic mall Positioning • Caters to mid to mid-upper level income shoppers • Working crowd (CBD area) Shoppers’ • Family (neighbourhood catchment (eg. Kenny Hills, Profile Bangsar, Damansara Heig
Slide 33: Sunway Putra Mall Merchandise Mix-Spectrum
STRICTLY PRIVATE & CONFIDENTIAL Merchandise Mix-Spectrum Category Definition 1st Liner Louis Vuitton, Prada, Christian Dior, Chanel, Hermes, YSL 2nd Liner Emporio Armani, Burberry, DKNY, Dunhill, Tods Bridge FENDI, BCBG, MAX & Co, Ralph Lauren Low Bridge Polo Jeans, Coach, A/X, DKNY Jeans, FCUK SUNW
Slide 34: 6. Capital Management
STRICTLY PRIVATE & CONFIDENTIAL 6. Capital Management 33
Slide 35: Capital Management
STRICTLY PRIVATE & CONFIDENTIAL Capital Management - Proactive capital management The main objective of initiating the exercise is to manage: 1. Refinancing risk –Staggering debt maturing 2. Interest rate management – optimize debt profile (floating vs. fixed) The prevailing low interest rate en
Slide 36: Capital Management
STRICTLY PRIVATE & CONFIDENTIAL Capital Management - Proactive capital management Debt Profile As at 9 October 2012 FP 2011 Term Loan (RM’ million) 1,571.0 1,573.4 Average cost of Debt 3.78% 4.65% * Debt service cover ratio (DSCR) 4.9 3.7 * Gearing ratio 33.5% 35.3% Loan Maturity Profile (9.10.2012)
Slide 37: 7. The Largest REIT in Malaysia
STRICTLY PRIVATE & CONFIDENTIAL 7. The Largest REIT in Malaysia 36
Slide 38: Dominant REIT in Malaysia
STRICTLY PRIVATE & CONFIDENTIAL Dominant REIT in Malaysia Total Asset Value (RM million) (RM millions) 4,950 4,600 3,575 2,895 1,285 1,404 1,453 1,596 1,027 948 1,183 607 815 822 159 195 Amanah Atrium REIT Tower REIT Quill Capita Hektar REIT UOA REIT AmanahRaya AmFirst REITAl-Hadharah Axis REIT Al-A
Slide 39: Sunway REIT Unitholders Information
STRICTLY PRIVATE & CONFIDENTIAL Sunway REIT Unitholders Information - Solid institutional backing Individual 8% Foreign 21% Sunway Berhad 37% Domestic 79% Institutions 55% Total number of unit holders as at 28 Sept 2012: 6,599 (6,407 as at 30 June 2012) 38
Slide 40: 8. Conclusion
STRICTLY PRIVATE & CONFIDENTIAL 8. Conclusion 39
Slide 41: Conclusion
STRICTLY PRIVATE & CONFIDENTIAL Conclusion The largest REIT in Malaysia (Asset value) - Asset value of RM4.95 billion Core assets in townships with robust growth Reputable sponsor with large visible pipeline assets - Pipeline assets in excess of RM2 billion Key growth drivers through acquisitions an
Slide 42: Appendices
STRICTLY PRIVATE & CONFIDENTIAL Appendices Appendix 1: General Information Appendix 2: Sunway Putra Place Acquisition Appendix 3: Recent Development in SRC Appendix 4: Organic Growth Information Appendix 5: Summary of Key Agreements Appendix 6: REIT Manager Fees’ Structure 41
Slide 43: Appendix 1: General Information
STRICTLY PRIVATE & CONFIDENTIAL Appendix 1: General Information 42
Slide 44: Sponsor – Sunway Berhad
STRICTLY PRIVATE & CONFIDENTIAL Sponsor – Sunway Berhad -Bigger, Better, Stronger Size Sunway City Berhad Enhances pipeline Sunway opportunities^ Synergy + Berhad* Sunway REIT Sunway REIT Management Sdn. Bhd. Branding Sunway Holding Berhad * Sunway Berhad was listed on the Main Board of Bursa Malays
Slide 45: Appendix 2: Sunway Putra Place Acquisition
STRICTLY PRIVATE & CONFIDENTIAL Appendix 2: Sunway Putra Place Acquisition 44
Slide 46: Property Auction History
STRICTLY PRIVATE & CONFIDENTIAL Property Auction History Reserve Price (RM mil) 800 705 -10% 700 635 -10% 600 571 -10% 514 500 400 300 200 100 0 Apr-08 Jan-09 Apr-10 Mar-11 45
Slide 47: An Opportunistic Acquisition
STRICTLY PRIVATE & CONFIDENTIAL An Opportunistic Acquisition Asset NLA No of Initial cost Related Total cost psf / 1 room acquisition acquisition room expenses cost (sq.ft.) (MYR mil) (MYR mil) (MYR mil) (MYR) Sunway Putra Mall 505,448 n.a 219.50 3.47 222.96 434 Sunway Putra Tower 317,051 n.a 80.30
Slide 48: Appendix 3: Recent Development in SRC
STRICTLY PRIVATE & CONFIDENTIAL Appendix 3: Recent Development in SRC 47
Slide 49: Sunway University
STRICTLY PRIVATE & CONFIDENTIAL Sunway University - GFA of >600,000 sq. ft, more than 9,000 students Proposed new 12-storey academic block Historical moment on 17 Dec 2010: The Chancellor Yang Berbahagia Tan Sri Dato’ Seri Dr. Jeffrey Cheah, AO receiving the letter of approval from YB Dato' •New exp
Slide 50: Monash University, Sunway Campus
STRICTLY PRIVATE & CONFIDENTIAL Monash University, Sunway Campus - GFA of >850,000 sq. ft, more than 4,000 students New Monash Monash Jeffrey Cheah School of University Sunway University, Medicine and Health student residence Sunway Sciences, Monash Campus University, Sunway Campus • Expect more tha
Slide 51: Sunway South Quay: International lakeside metropolis
Sunway South Quay: International lakeside metropolis STRICTLY PRIVATE & CONFIDENTIAL -potential 4,000 new units boasting 20,000 new residents with high spending power A’marine Lakeside Artist’s impression of Sunway Condominiums South Quay upon full completion. Expected 4,000 •242 units; •540 car par
Slide 52: Appendix 4: Organic Growth Information
STRICTLY PRIVATE & CONFIDENTIAL Appendix 4: Organic Growth Information 51
Slide 53: Organic Growth - Bustling township factor
STRICTLY PRIVATE & CONFIDENTIAL Organic Growth - Bustling township factor Thriving developments around Sunway Resort City (SRC): New projects/expansions undertaken Brief description Additional population forecast over by sponsor next 3 years 1. The Pinnacle Grade A office building 5,000 office staff
Slide 54: Asset Enhancement Initiatives (AEIs)
STRICTLY PRIVATE & CONFIDENTIAL Asset Enhancement Initiatives (AEIs) - Completed AEIs, double digit ROI Sunway Pyramid Extension Near doubling of NLA Average Net Total NLA Occupancy Year Rental Rate (sq. ft.) (%) (RM psf/month) (RM mil) SP2 2006 886,000 98 6.18 5.5 2008 1,656,000 97 7.58 12.5 Increm
Slide 55: Asset Enhancement Initiatives (AEIs)
STRICTLY PRIVATE & CONFIDENTIAL Asset Enhancement Initiatives (AEIs) - Completed AEIs, double digit ROI Refurbishment of Sunway Tower Before refurbishment After refurbishment Average Net Total NLA Occupancy Year Rental Rate (sq. ft.) (%) (RM psf/month) (RM mil) 2008 268,412 70 4.05 0.76 2010 268,412
Slide 56: Asset Enhancement Initiatives (AEIs)
STRICTLY PRIVATE & CONFIDENTIAL Asset Enhancement Initiatives (AEIs) - Completed AEIs Refurbishment of Fuzion (Coffee House) Description Value Creation Investment RM 12.0 million Additional NLA N.A ROI Achieved 6.0% Source: Sunway REIT 55
Slide 57: Asset Enhancement Initiatives (AEIs)
STRICTLY PRIVATE & CONFIDENTIAL Asset Enhancement Initiatives (AEIs) - Completed AEIs Canopy Walk Extension Phase 3 Description Value Creation Investment RM 4.0 million Additional 1,294 sq. ft. NLA Expected 20.7% ROI Duration 3 months (Oct – Dec 2011) Source: Sunway REIT 56
Slide 58: Ongoing Asset Enhancement Initiatives (AEIs)
STRICTLY PRIVATE & CONFIDENTIAL Ongoing Asset Enhancement Initiatives (AEIs) - Integration above and under ground with additional alfresco dining area Proposed Link Bridges and Alfresco Dining The Pinnacle Menara Sunway 3 level alfresco Link dining area bridge Sunway Resort Link Hotel & Spa bridge A
Slide 59: Ongoing Asset Enhancement Initiatives (AEIs)
STRICTLY PRIVATE & CONFIDENTIAL Ongoing Asset Enhancement Initiatives (AEIs) - Integration above and under ground with additional alfresco dining area Construction progress photo taken at actual site on 5 June 2012 Expected Investment (RM) 61,552,000 Expected NLA created (sq. ft.) from alfresco dini
Slide 60: Ongoing Asset Enhancement Initiatives (AEIs)
STRICTLY PRIVATE & CONFIDENTIAL Ongoing Asset Enhancement Initiatives (AEIs) - Facelift to drive business to the next level Sunway Hotel Seberang Jaya Refurbishment Artist Impression of Hotel Lobby Refurbished Room taken in July 2012 Description Value Creation Investment RM 17.4 million Additional N
Slide 61: Appendix 5: Summary of Key Agreements
STRICTLY PRIVATE & CONFIDENTIAL Appendix 5: Summary of Key Agreements 60
Slide 62: Hotel Master Lease Agreement
STRICTLY PRIVATE & CONFIDENTIAL Hotel Master Lease Agreement Calculation of Total Rent: The higher of Variable Rent or Guaranteed Rent (1) Total Rent − Variable Rent: Base Rent plus 70.0% of (Gross Operating Profit less Master Lease Expenses) − Base Rent: 20.0% of Revenue − Gross Operating Profit:
Slide 63: Right of First Refusal
STRICTLY PRIVATE & CONFIDENTIAL Right of First Refusal Future Investment properties that: properties − Are located in Malaysia and the Asia-Pacific region involved − Are from time to time owned by Sunway Berhad and its 100% owned subsidiaries ("Sunway Entity"); and Mechanics In the event that an
Slide 64: Appendix 6: REIT Manager Fees Structure
STRICTLY PRIVATE & CONFIDENTIAL Appendix 6: REIT Manager Fees Structure 63
Slide 65: Annual Manager Fee for Sunway REIT Manager Sdn. Bhd
STRICTLY PRIVATE & CONFIDENTIAL Annual Manager Fee for Sunway REIT Manager Sdn. Bhd 1. Base fee 0.3% per annum of Total Asset Value (exclusive of tax, if any) accruing monthly and payable to the Manager every Quarter Year in arrear; 2. Performance fee 3.0% of Net Property Income (exclusive of tax, i
Slide 66: Thank You
STRICTLY PRIVATE & CONFIDENTIAL Thank You For further information on this presentation kit, please kindly contact: Crystal Teh Sunway REIT Management Sdn. Bhd. (The Manager of Sunway REIT) Email: crystalt@sunway.com.my Contact: +603 5639 8864 Website of Sunway REIT: www.sunwayreit.com 65
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