Sunway Real Estate Investment Trust · MYX:SUNREIT
Sunway Real Estate Investment Trust — 3Q FY2019 Earnings Presentation
57 slides from Sunway Real Estate Investment Trust's earnings presentation, May 2, 2019
Slide 1: Financial Results Third Quarter Ended 31 March 2019
FINANCIAL RESULTS Third Quarter Ended 31 March 2019 (FYE 30 June 2019) 2 May 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 (3Q2019) 2. Financial Results (3Q2019) 3. Portfolio Performance (3Q2019) 4. Property Development Activities & Assets Enhancement Initiatives 5. Market Outlook 6. Investor Relations Appendix - Property Performance (3Q2019) Empowering Businesses Curating Exp
Slide 4: Financial Highlights (3Q2019)
FINANCIAL HIGHLIGHTS (3Q2019) 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 January 2019 - 31 March 2019 2.25 2.38 2.58 2.37 Distribution Per Unit (DPU) (sen) 2.58 Notice of Entitlement 2 May 2019 Ex-Dividend Date 15 May 2019 Book Closure Date 17 May 2019 3Q2019 2Q2019 3Q2
Slide 6: 5-Year Quarterly DPU
5-Year Quarterly DPU 1Q 2Q 3Q 4Q 9.18 9.19 9.57 8.73 2.15 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 Annualised Distribution Yield 2.8% 5.4% (FY2019 based on annualised DPU) (Based on unit pri
Slide 7: Financial Highlights – 3Q2019
Financial Highlights – 3Q2019 Highlights 3Q 2019 3Q 2018 No. of Properties 16 16 Property Value (RM'billion) 7.367 7.143 Units in Circulation 2,945,078,000 2,945,078,000 Unit Price as at 31 March (RM) 1.80 1.60 Market Capitalisation (RM'billion) 5.301 4.712 Net Asset Value ("NAV") Per Unit (RM) 1.45
Slide 8: Financial Highlights – 3Q2019 (Cont'd)
Financial Highlights – 3Q2019 (Cont’d) Reported in RM’000 Gross revenue 3Q 2019 151,499 Gross Revenue for 3Q2019 increased by 7.1% 7.1% or RM10.0 million compared to 3Q2018 mainly attributable to better performance of all business segments, including the income guarantee for 3Q 2018 141,515 Sunway C
Slide 9: Financial Highlights – YTD 3Q2019
Financial Highlights – YTD 3Q2019 Reported in RM’000 Gross revenue YTD 3Q2019 143,741 139,500 151,499 434,740 Gross Revenue for YTD 3Q2019 increased by 2.8% 2.5% 2.5% or RM10.6 million compared to YTD 3Q2018 mainly contributed by overall better YTD performance of all business segments. 3Q2018 141,16
Slide 10: Financial Results (3Q2019)
FINANCIAL RESULTS (3Q2019) Empowering Businesses Curating Experiences Enriching Lives 10
Slide 11: Statement of Comprehensive Income – Consolidated
Statement of Comprehensive Income – Consolidated 3Q 2019 3Q 2018 Change YTD 2019 YTD 2018 Change RM'000 RM'000 % RM'000 RM'000 % Gross revenue 151,499 141,515 7.1% 434,740 424,154 2.5% Property operating expenses (37,725) (36,212) 4.2% (106,227) (104,498) 1.7% Net property income 113,774 105,303 8.0
Slide 12: Statement of Comprehensive Income – Consolidated (Cont'd)
Statement of Comprehensive Income – Consolidated (Cont’d) Explanation: 1 Interest income for 3Q2019 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 31.03.19 30.06.18 31.03.19 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 7,366,732 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 RM86.5 million mainly contributed by the refurbishment of grand ballroom, meeting and function rooms of Sunway Resort Hotel & Spa which was completed in November 2018 and on-going works for the
Slide 15: Statement of Cash Flows – Consolidated
Statement of Cash Flows – Consolidated Cumulative Quarter ended 1 Net cash from operating activities for YTD 3Q2019 was 31.03.2019 31.03.2018 RM278.4 million, lower by RM6.6 million compared to YTD RM'000 RM'000 3Q2018, attributed by lower collection by RM 9.8 million OPERATING ACTIVITIES mainly due
Slide 16: Debt Profile as of 31 March 2019
Debt Profile as of 31 March 2019 Facility Limit Amount Debt Maturity Profile (RM'm) RM'million RM'million 1 Revolving Loan (USD100m) 411.1 390.9 Commercial Papers (CP) / 1,500.0 1,500.0 2 Revolving Loan (RL) 3 Unrated MTNs 10,000.0 1,000.0 1,500.0 Total Gross Borrowings 2,890.9 Unamortised transacti
Slide 17: Portfolio Performance (3Q2019)
PORTFOLIO PERFORMANCE (3Q2019) Empowering Businesses Curating Experiences Enriching Lives 17
Slide 18: Revenue & NPI growth in 3Q FY2019
Revenue & NPI growth in 3Q FY2019 Reported in RM’million Retail Hotel Office Revenue 3Q2019 110.7 23.4 9.9 3Q2018 107.9 3% 18.0 30% 8.5 18% NPI 3Q2019 79.5 21.5 5.3 3Q2018 3% 77.0 16.7 29% 4.4 18% The retail segment recorded The office segment recorded Notes gross revenue of RM110.7 million The hote
Slide 19: Revenue & NPI growth in 3Q 2019 (Cont'd)
Revenue & NPI growth in 3Q 2019 (Cont’d) Reported in RM’million Services Industrial & Others Overall Revenue 3Q2019 6.0 1.5 151.5 3Q2018 5.8 4% 1.4 10% 141.5 7% NPI 3Q2019 6.0 1.5 113.8 3Q2018 8% 5.8 4% 1.4 10% 105.3 Sunway Medical Centre Sunway REIT Industrial - Shah Revenue of the portfolio Notes
Slide 20: Revenue & NPI growth YTD 3Q 2019
Revenue & NPI growth YTD 3Q 2019 Reported in RM’million Retail Hotel Office Revenue YTD3Q2019 320.9 63.6 28.4 1% YTD3Q2018 315.3 2% 63.9 24.4 17% NPI YTD3Q2019 233.2 57.9 15.5 5% YTD3Q2018 226.3 3% 60.7 12.1 29% The retail segment recorded The office segment recorded Notes gross revenue of RM320.9 m
Slide 21: Revenue & NPI growth in YTD 3Q 2019 (Cont'd)
Revenue & NPI growth in YTD 3Q 2019 (Cont’d) Reported in RM’million Services Industrial & Others Overall Revenue YTD3Q2019 17.5 4.3 434.7 YTD3Q2018 16.9 4% 3.7 16% 424.2 3% NPI YTD3Q2019 17.5 4.3 328.5 YTD3Q2018 16.9 4% 3.7 16% 319.7 3% Sunway Medical Centre Revenue and NPI of Sunway Notes contribut
Slide 22: 3Q2019 and YTD 3Q2019 Revenue Contribution (by Property)
3Q2019 and YTD 3Q2019 Revenue Contribution (by Property) YTD 3Q YTD 3Q 3Q 2019 3Q 2018 Variance Change 2019 2018 Variance Change By Property RM'mil RM'mil RM'mil % RM'mil RM'mil RM'mil % Sunway Pyramid Mall 85.6 81.7 3.9 4.8% 246.6 237.4 9.2 3.9% Sunway Carnival Mall 12.0 11.9 0.2 1.6% 35.3 35.3 (0.
Slide 23: 3Q2019 NPI and NPI Margin Contribution (by Property)
3Q2019 NPI and NPI Margin Contribution (by Property) NPI NPI Margin 3Q 2019 3Q 2018 Variance Change 3Q 2019 3Q 2018 Variance By Property RM'mil RM'mil RM'mil % % % % Sunway Pyramid Mall 66.1 61.5 4.5 7.4% 77.2% 75.3% 1.8% Sunway Carnival Mall 6.9 7.5 (0.5) -7.2% 57.6% 63.0% -5.5% SunCity Ipoh Hyperm
Slide 24: YTD 3Q2019 NPI and NPI Margin Contribution (by Property)
YTD 3Q2019 NPI and NPI Margin Contribution (by Property) NPI NPI Margin YTD 3Q 2019 YTD 3Q 2018 Variance Change YTD 3Q 2019 YTD 3Q 2018 Variance By Property RM'mil RM'mil RM'mil % % % % Sunway Pyramid Mall 192.7 180.3 12.4 6.9% 78.2% 75.9% 2.2% Sunway Carnival Mall 20.7 22.6 (1.9) -8.5% 58.6% 64.0%
Slide 25: Key Performance Indicators – YTD 3Q2019
Key Performance Indicators – YTD 3Q2019 Industrial & Retail Hotel Office Services Others Average Occupancy 97% 69% 71% 100% 100% Rates NPI Margin 73% 91% 55% 100% 100% 1 Empowering Businesses Curating Experiences Enriching Lives 25
Slide 26: Property Development Activities & Asset Enhancement Initiatives (AEI)
PROPERTY DEVELOPMENT ACTIVITIES & ASSET ENHANCEMENT INITIATIVES (AEI) (3Q2019) 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 61.8 million to YTD 3Q 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 38.4 million initiation to YTD 3Q2019 Duration 4 months from July 2018 Status of completion Completed Empowering
Slide 29: Market Outlook (3Q 2019)
MARKET OUTLOOK (3Q 2019) Empowering Businesses Curating Experiences Enriching Lives 29
Slide 30: General Outlook
General Outlook o Global economy started the year on a soft footing, but a pick up is expected in the second half of CY2019. The improvement will be supported by accommodation in monetary policy led by the United States (US). In response to rising global risks, the US Federal Reserve paused interest
Slide 31: General Outlook
General Outlook o At the Monetary Policy Committee (MPC) meeting on 5 March 2019, the MPC maintained the Overnight Policy Rate (OPR) at 3.25%. BNM guidance for monetary policy in CY2019 is to remain supportive of economic growth amid a relatively benign inflationary environment. Recognizing the down
Slide 32: Retail Segment
Retail Segment o The Retail Group Malaysia (RGM) maintained its CY2019 retail sales forecasts of 4.5% despite a lacklustre retail sales in the first two months of CY2019 which coincided with the Chinese New Year festive season. RGM expects retail sales performance to pick up in 2Q CY2019 ahead of Ha
Slide 33: Hotel Segment
Hotel Segment o Malaysia recorded a stable tourist arrivals in CY2018. Tourist arrivals was flattish at 25.83 million in CY2018 (CY2017: 25.95 million), with marginal improvement in tourism receipts of RM84.1 billion (CY2017: RM82.1 billion). The Ministry of Tourism targets a 8.8% improvement in tou
Slide 34: Office Segment
Office Segment o The office sub-sector has suffered from a prolonged time of a massive oversupply condition and the situation is not expected to be resolved in the short to medium terms. The country needs to create catalytic reform in order to address the oversupply situation. o On a brighter note,
Slide 35: Investor Relations (3Q 2019)
INVESTOR RELATIONS (3Q 2019) Empowering Businesses Curating Experiences Enriching Lives 35
Slide 36: Unit Price Performance from IPO to YTD 3Q FY2019
Unit Price Performance from IPO to YTD 3Q FY2019 Unit Price Performance of Sunway REIT versus Benchmarks (8 July 2010 – 31 March 2019) 140.0% GPR APREA Composite REIT Index - Malaysia 155.7% 120.0% Sunway REIT 100.0% 100.0% 80.0% 60.0% FBM KLCI 40.0% 24.9% 20.0% 0.0% Feb 2015 Oct 2012 Jun 2010 May 2
Slide 37: Unit Price Performance for YTD 3Q FY2019
Unit Price Performance for YTD 3Q FY2019 Unit Price Performance of Sunway REIT versus Benchmarks (30 June 2018 – 31 March 2019) 10.0% 8.0% 6.0% Bursa Malaysia REIT Index 2.8% 4.0% Sunway REIT 2.0% 1.7% 0.0% Jun 2018 -2.0% Sep 2018 Dec 2018 Mar 2019 -4.0% FBM KLCI -6.0% -2.8% -8.0% -10.0% Performance
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 31 March 2019)
Unitholders’ Composition (as at 31 March 2019) Foreign Retail 9.4% 6.4% Sunway Berhad Institutions 40.9% & Corporate 53.0% Domestic 90.6% March 2019 December 2018 Q-o-Q Change No of unitholders 12,685 12,899 -214 (-1.7%) Retail unitholders 6.4% 7.0% -0.6% Foreign unitholders 9.4% 8.7% 0.7% Sunway Be
Slide 40: Analysts Recommendation (as at March 2019)
Analysts Recommendation (as at 31 March 2019) 8.3 7.2 Target Price as at 31 March 2019 (RM) 6.7 5.6 5.6 Upside / Downside to unit price as at 31 March 2019 (%) 5.0 4.5 4.4 2.8 1.95 1.93 1.92 1.90 1.90 1.90 1.89 1.88 1.85 1.81 1.80 1.75 1.74 1.70 0.6 0.0 (2.8) (3.3) (5.6) UOB Kay Hian TA Research AmI
Slide 41: Comparative Yields for Various Assets
Comparative Yields for Various Assets 7.0% 6.41%2 6.15%5 6.0% 5.44%1 5.0% 4.0% 3.77%3 3.33%4 3.25%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 9.80 sen and unit price as at 31 March 2019 (Sou
Slide 42: Appendix: Property Performance (3Q 2019)
APPENDIX: PROPERTY PERFORMANCE (3Q 2019) Empowering Businesses Curating Experiences Enriching Lives 42
Slide 43: Retail Properties - Sunway Pyramid Shopping Mall
RETAIL PROPERTIES - Sunway Pyramid Shopping Mall Average occupancy rate Projected lease expiry schedule 50.0% 100.0% 98.9% 98.5% 99.1% 98.1% 98.3% 98.0% 40.0% 95.0% 30.0% 90.0% 20.0% 85.0% 10.0% 80.0% 5.5% 46.8% 27.9% 14.4% 3.9% 75.0% 0.0% FY2019 FY2020 FY2021 FY2022 Monthly Jun-15 Jun-16 Jun-17 Jun
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% 97.9% 97.0% 94.4% 60.0% 95.0% 90.0% 40.0% 85.0% 20.0% 80.0% 75.0% 8.9% 65.7% 14.4% 6.6% 0.7% 0.0% Ju n-15 Ju n-16 Ju n-17 Ju n-18 YTD 3Q YTD 3Q FY2019 FY2020 FY2021 FY2022 M
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% Jun-15 Jun-16 Jun-17 Jun-18 YTD 3Q YTD 3Q 2019 2018 SunCity Ipoh Hypermarket is leased to a single tenant, a major hypermarket and retailer chain operating under the “Giant” bra
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% 90.8% 90.5% 50.0% 86.3% 82.4% 80.0% 74.9% 40.0% 60.0% 30.0% 40.0% 20.0% 20.0% 10.0% 8.1% 10.9% 53.7% 8.9% 8.2% 0.0% 0.0% Jun-15 Jun-16 Jun-17 Jun-18 YTD 3Q YTD 3Q FY2019 FY2020 FY2021 FY20
Slide 47: Retail Properties - Sunway Clio Retail
RETAIL PROPERTIES - Sunway Clio Retail Average occupancy rate Projected lease expiry schedule 60.0% 100.0% 93.1% 88.6% 80.0% 40.0% 58.3% 60.0% 43.0% 40.0% 20.0% 20.0% 3.0% 0.0% 30.3% 45.2% 7.8% 5.7% 0.0% 5.7% Jun-16 Jun-17 Jun-18 YTD 3Q YTD 3Q FY2019 FY2020 FY2021 FY2022 Monthly 2019 2018 tenancy No
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% 77.9% 78.0% 73.5% 70.0% 64.8% 60.0% 50.0% Ju n-15 Ju n-16 Ju n-17 Ju n-18 YTD 3Q YTD 3Q 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% 81.2% 80.0% 71.8% 71.4% 71.3% 70.0% 66.9% 60.0% 56.8% 50.0% Ju n-15 Ju n-16 Ju n-17 Ju n-18 YTD 3Q YTD 3Q 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% 74.8% 72.3% 72.3% 71.5% 69.9% 70.0% 60.0% 50.0% Ju n-16 Ju n-17 Ju n-18 YTD 3Q YTD 3Q 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. Th
Slide 51: Hospitality Properties - Sunway Hotel Seberang Jaya
HOSPITALITY PROPERTIES –Sunway Hotel Seberang Jaya Average occupancy rate 80.0% 76.4% 75.9% 74.5% 75.0% 71.1% 69.6% 70.0% 65.5% 65.0% 60.0% Jun-15 Jun-16 Jun-17 Ju n-18 YTD 3Q YTD 3Q 2019 2018 Note 1: The hotel properties are under 10-year master leases. The master lease of Sunway Hotel Seberang Jay
Slide 52: Hospitality Properties - Sunway Putra Hotel
HOSPITALITY PROPERTIES - Sunway Putra Hotel Average occupancy rate 80.0% 71.0% 72.8% 68.0% 62.3% 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 3Q YTD 3Q 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% 92.0% 90.0% 87.7% 85.7% 80.0% 74.0% 70.0% 70.0% 60.0% Ju n-15 Ju n-16 Ju n-17 Ju n-18 YTD 3Q YTD 3Q 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% 93.6% 92.1% 89.3% 60.0% 90.0% 85.0% 40.0% 80.0% 20.0% 10.4% 11.5% 8.7% 64.2% 75.0% 0.0% Jun-15 Jun-16 Jun-17 Jun-18 YTD 3Q YTD 3Q FY2019 FY2020 FY2021 FY2022 2019 2018
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% 21.1% 21.0% 20.7% 12.0% 9.0% 20.0% 19.6% 19.4% 6.0% 19.0% 3.0% 18.0% 2.2% 4.1% 9.5% 6.0% 0.0% Jun-16 Jun-17 Jun-18 YTD 3Q YTD 3Q FY2019 FY2020 FY2021 FY2022 2019 2018 The average occupancy
Slide 56: Office Properties - Sunway Putra Tower
OFFICE PROPERTIES - Sunway Putra Tower Average occupancy rate Projected lease expiry schedule 40.0% 100.0% 35.0% 80.7% 80.0% 30.0% 56.0% 25.0% 60.0% 52.8% 48.5% 20.0% 40.0% 36.6% 15.0% 26.4% 10.0% 20.0% 5.0% 0.0% 16.2% 20.9% 39.2% 9.3% 0.0% Jun-15 Jun-16 Jun-17 Jun-18 YTD 3Q YTD 3Q FY2019 FY2020 FY2
Slide 57: Office Properties - Wisma Sunway
OFFICE PROPERTIES - Wisma Sunway Average occupancy rate Projected lease expiry schedule 50.0% 100.0% 92.1% 89.8% 90.1% 40.0% 90.0% 86.9% 78.3% 79.0% 30.0% 80.0% 70.0% 20.0% 60.0% 10.0% 3.0% 18.6% 30.8% 47.6% 50.0% 0.0% Jun-15 Jun-16 Jun-17 Jun-18 YTD 3Q YTD 3Q FY2019 FY2020 FY2021 FY2022 2019 2018 T
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