Sunway Real Estate Investment Trust · MYX:SUNREIT
Sunway Real Estate Investment Trust — Real Estate Investment Trusts (REIT) Conference 2012
29 slides from Sunway Real Estate Investment Trust's conference presentation, Jun 25, 2012
Slide 1: Real Estate Investment Trusts (REIT) Conference
Real Estate Investment Trusts (REIT) Conference Management and Pivotal Role of the REIT Manager 25 – 26 June 2012 Hotel Istana Kuala Lumpur
Slide 2: Disclaimer
STRICTLY PRIVATE & CONFIDENTIAL DISCLAIMER This presentation may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed or implied in forward-looking statements as a result of a number of ris
Slide 3: Table of Contents
STRICTLY PRIVATE & CONFIDENTIAL Table of Contents 1. Collaborating the role of promoters, trustees, regulators and indirect agents in developing a competitive REIT market 2. Highlighting innovative techniques for improvement of capabilities 3. Ensuring continuous measurement throughout the lifecycle
Slide 4: Part 1: Collaborating the role of promoters, trustees, regulators and indirect agents
Part 1: Collaborating the role of promoters, trustees, regulators and indirect agents in developing a competitive REIT market 3
Slide 5: REIT Structure – REIT Manager operates alongside various external stakeholders
STRICTLY PRIVATE & CONFIDENTIAL REIT Structure – REIT Manager operates alongside with the various external stakeholders Sponsor Unit holders (if applicable) Investment Distributions in Units Acts on behalf Management of unit holders services REIT Manager REIT Trustee Management Trustee Fees Fees Reg
Slide 6: REIT Manager and Regulators
STRICTLY PRIVATE & CONFIDENTIAL REIT Manager and Regulators Over the years, regulators have played pivotal role in supporting the growth of REIT industry in enhancing the competitiveness of Malaysian REITs (M-REITs) vis- à-vis regional players. To further enhance the competitiveness of M-REITs,
Slide 7: Withholding Tax – Room for relaxation
STRICTLY PRIVATE & CONFIDENTIAL Withholding Tax – Room for relaxation Type of Unitholders Malaysia Singapore Resident / non-resident individuals 10% NIL Resident companies No withholding tax – 17% income tax at 25% Non-resident companies 25% 10% Resident / non-resident institutional 10% 10% investor
Slide 8: Gearing Limit – To provide for higher debt headroom
STRICTLY PRIVATE & CONFIDENTIAL Gearing Limit – To provide for higher debt headroom Malaysia Singapore Total borrowings should not exceed 50% of Total borrowings should not exceed 35% of the the total asset value of the fund. total asset value of the fund. The gearing limit may increase to a maximum
Slide 9: Issuance of New Units – Strive for speedy completion
STRICTLY PRIVATE & CONFIDENTIAL Issuance of New Units – Strive for speedy completion The typical timeline for issuance of new units (subject to change depending on circumstances) FOR ILLUSTRATION PURPOSE ONLY Issuance of new units in Malaysia (Without general mandate from unitholders) Submission to
Slide 10: Issuance of New Units – Strive for speedy completion
STRICTLY PRIVATE & CONFIDENTIAL Issuance of New Units – Strive for speedy completion The typical timeline for issuance of new units (subject to change depending on circumstances) FOR ILLUSTRATION PURPOSE ONLY Issuance of new units in Malaysia (up to 20% approved fund size with general mandate) Stage
Slide 11: Issuance of New Units – Strive for speedy completion
STRICTLY PRIVATE & CONFIDENTIAL Issuance of New Units – Strive for speedy completion In Singapore, issuance of new units do not require approval from Monetary Authority of Singapore (MAS). Only require lodgement of the Offerings Circulars. In Malaysia, any issuance of new units require approval
Slide 12: Greenfield Development – Allows greater flexibility
STRICTLY PRIVATE & CONFIDENTIAL Greenfield Development- Allows greater flexibility Malaysia Singapore The exposure to real estate under The total contract value of property construction does not exceed 10% of total development activities undertaken should not asset value (after the acquisition) prov
Slide 13: Property Acquisition Valuation – Towards disclosure based regime
Property Acquisition Valuation – Towards disclosure STRICTLY PRIVATE & CONFIDENTIAL based regime Related Party Transaction Non-Related Party Transaction3 Acquisition via debt Acquisition via equity Acquisition via Acquisition via debt equity Below 5%2 Exceed 5%2 Below 5%2 Exceed 5%2 Unitholder’s X
Slide 14: Property Manager – REIT is property based business
STRICTLY PRIVATE & CONFIDENTIAL Property Manager – REIT is property based business Current Practice Valuers, Appraisers & Estate Agent Act 1981 under section 19 (c): Only registered independent valuers can be appointed as Property Managers for properties of REITs. Under section 19 (c) of Act 242, ex
Slide 15: REIT Manager and Sponsor – Incentives for Sponsor
STRICTLY PRIVATE & CONFIDENTIAL REIT Manager and Sponsor – Incentives for Sponsor The relationship between the REIT Manager and Sponsor is mutual. A REIT affiliated to reputable Sponsor usually garner favourable perception amongst investors. Sponsor plays vital roles in: Supplying pipeline ass
Slide 16: REIT Manager and Trustee – Bridging the gap
STRICTLY PRIVATE & CONFIDENTIAL REIT Manager and Trustee – Bridging the gap A Trustee should actively monitor the operation and management of the fund to safeguard the interest of unitholders. A Trustee should ensure the fund is operated and managed in accordance to the Deed, Securities Commissi
Slide 17: REIT Manager and Indirect Agents – Facilitate the future growth of M-REITs
STRICTLY PRIVATE & CONFIDENTIAL REIT Manager and Indirect Agents – Facilitate the future growth of M-REITs REIT Managers work closely with external stakeholders including: Malaysian REIT Manager Association (MRMA) Investment Bankers Malaysian REIT Manager Association (MRMA) MRMA is an associ
Slide 18: REIT Manager and Indirect Agents – Facilitate the future growth of M-REITs
STRICTLY PRIVATE & CONFIDENTIAL REIT Manager and Indirect Agents – Facilitate the future growth of M-REITs Malaysian REIT Manager Association (MRMA) – cont’ M-REITs operate in a highly regulated regime, governed by the Capital Markets Services Act 2007 (CMSA), Securities Commission Guidelines on R
Slide 19: REIT Manager and Indirect Agents – Facilitate the future growth of M-REITs
STRICTLY PRIVATE & CONFIDENTIAL REIT Manager and Indirect Agents – Facilitate the future growth of M-REITs Investment Bankers REIT Managers are supported by investment bankers through knowledge transfer in the areas of corporate exercise, funding requirement amongst others. Sharing of regional exp
Slide 20: Part 2: Innovative techniques for improvement of capabilities
Part 2: Innovative techniques for improvement of capabilities 19
Slide 21: Innovation in REIT Management
STRICTLY PRIVATE & CONFIDENTIAL Innovation in REIT Management The skills of REIT Managers are being recognized based on the value enhancement of assets under management via growth strategies that the managers are capable to create for unitholders in terms of DPU growth and total return. REIT Man
Slide 22: Asset Management Initiatives & Assets Enhancement Initiatives
Asset Management Initiatives & Assets Enhancement STRICTLY PRIVATE & CONFIDENTIAL Initiatives Traditionally, the key skill sets of REIT Managers lie in asset management initiatives (AMIs) and asset enhancement initiatives (AEIs). AMIs AEIs Rental reversion Increase in net lettable area (NLA)
Slide 23: Acquisitions – Structuring innovative deals
STRICTLY PRIVATE & CONFIDENTIAL Acquisitions – Structuring innovative deals REIT Managers are challenged by scarcity of strong quality assets and intense competition amongst M-REIT players eyeing for the same pool of assets. In view of the circumstances, REIT Managers are moving towards structur
Slide 24: Capital Management – Flow through to unitholders
STRICTLY PRIVATE & CONFIDENTIAL Capital Management – Flow through to unitholders Increasingly, REIT Managers are playing more active role in capital management. The benefits of undertaking a proactive capital management role is aimed to achieve the following: Exploit the prevailing interest rate
Slide 25: Distribution Policy – Unitholders enjoy higher distribution payout
STRICTLY PRIVATE & CONFIDENTIAL Distribution Policy – Unitholders enjoy higher distribution payout REIT Managers can embark innovative distribution policy where managers’ fees are paid partially in units. This methodology will benefit unitholders in receiving higher dividend payout as distributi
Slide 26: Part 3: Continuous measurement throughout the lifecycle of the project
Part 3: Continuous measurement throughout the lifecycle of the project 25
Slide 27: Measurement of assets performance
STRICTLY PRIVATE & CONFIDENTIAL Measurement of assets performance Rental Rate Measurement Occupancy NPI of assets level performance Financial Ratio Return on Investment (ROI) Financial Internal Rate of Return (IRR) Ratios* Gross Operating Margins 26
Slide 28: Occupancy Rate
STRICTLY PRIVATE & CONFIDENTIAL Measurement of assets performance FOR ILLUSTRATION PURPOSE ONLY Brand New Aging Refurbished Lifecycle of property o Market share stagnant or Deteriorated o Market share o Market share condition if o Rental rate not Occupancy Rate o Rental rate o Rental rate refurbishe
Slide 29: Thank you
Thank you For further information on this presentation kit, please kindly contact: 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 28
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