Sunway Real Estate Investment Trust · MYX:SUNREIT
Sunway Real Estate Investment Trust — Q2 FY2015 Earnings Presentation
58 slides from Sunway Real Estate Investment Trust's earnings presentation, Jan 28, 2015
Slide 1: Sunway REIT Financial Results 2nd Quarter Ended 31 December 2014
SUNWAY REIT Financial Results 2 nd Quarter Ended 31 December 2014 (FYE 30 June 2015) Announcement Date: 28 January 2015
Slide 2: Disclaimer
DISCLAIMER This presentation is for information purposes only and does not constitute an offer, solicitation or advertisement w ith respect to the purchase or sale of any security of Sunw ay Real Estate Investment Trust (“ Sunw ay REIT” ) and no part of it shall form the basis of, or be relied on in
Slide 3: Table of Contents
Table of Contents 1. Financial Highlights & Key Updates 2. 2Q 2015 Financial Results 3. 2Q 2015 Portfolio Performance 4. 2Q 2015 Property Performance 5. Market Outlook 6. Investor Relations Driving values through sustainable growth 3
Slide 4: 1. Financial Highlights & Key Updates
1. Financial Highlights & Key Updates Driving values through sustainable growth 4
Slide 5: Distribution Details
Distribution Details Dividend Distribution Details Distribution Period 1 October 2014 - 31 December 2014 1 Distribution per Unit (DPU) (sen) 2.27 Notice of Entitlement 28 January 2015 Ex-Dividend Date 12 February 2015 Book Closure Date 16 February 2015 Payment Date 3 March 2015 1 Proposed income dis
Slide 6: Financial Highlights
Financial Highlights Highlights 2Q 2015 2Q 2014 Change % No. of Properties 12 12 0.0% Property Value (RM'billion) 5.652 5.229 8.1% No. of Units in Circulation 2,933,242,500 2,923,685,000 0.3% Unit Price as at 31 Dec (RM) 1.52 1.24 22.6% Market Capitalisation (RM'billion) 4.459 3.625 23.0% Net Asset
Slide 7: Financial Highlights (Cont'd)
Financial Highlights (Cont’d) 250.0 Gross Revenue (RM'm) Net Property Income (RM'm) 227.8 200.0 210.5 173.2 200.0 1 2 2.7% 161.5 3.3% 150.0 150.0 113.8 114.0 110.3 100.0 100.2 86.5 86.7 84.4 100.0 77.1 50.0 50.0 - - 1Q 2Q YTD 1Q 2Q YTD 2015 2014 2015 2014 1 Gross revenue increased 3.3% or RM 3.7 mil
Slide 8: Financial Highlights (Cont'd)
Financial Highlights (Cont’d) Profit Before Tax (Realised) (RM'm) DPU (sen) 200.0 5.0% 6.00 1 2 1.6% 5.00 1.8% 150.0 4.55 126.4 4.23 117.4 4.00 100.0 3.00 2.28 2.27 63.4 63.0 2.23 62.0 2.00 55.4 2.00 50.0 1.00 - - 1Q 2Q YTD 1Q 2Q YTD 2015 2014 2015 2014 1 PBT(Realised) increased by 1.6% or RM1.0 mil
Slide 9: Key update
Key update 1) Material Litigation Case: Sunway Putra’s (formerly known as Sunway Putra Place) Assessment for Damages Defendant: Metroplex Holdings Sdn Bhd (“MHSB”) After the Federal Court has on 20 February 2012 dismissed MHSB’s application for leave to appeal, RHB Trustees Berhad (as trustee of Sun
Slide 10: 2. 2Q 2015 Financial Results
18.1% 2. 2Q 2015 Financial Results Driving values through sustainable growth 10
Slide 11: Statement of Comprehensive Income – Consolidated
Statement of Comprehensive Income – Consolidated 2Q 2015 2Q 2014 Change YTD 2015 YTD 2014 Change RM'000 RM'000 % RM'000 RM'000 % Gross revenue 113,996 110,313 3.3% 227,808 210,489 8.2% 1 1 Less : Property operating expenses (27,259) (25,888) 5.3% (54,579) (48,958) 11.5% Net property income 86,737 84
Slide 12: Statement of Financial Position – Consolidated
Statement of Financial Position – Consolidated 31.12.14 30.06.14 RM'000 RM'000 ASSETS Non-current assets Plant and equipment 3,737 3,039 Investment properties 5,652,110 5,520,000 5,655,847 5,523,039 Current assets Receivables, deposits and prepayments 34,193 16,361 Cash and bank balances 64,639 54,6
Slide 13: Debt Profile
Debt Profile Facility Limit Loan Maturity Profile (RM'mil) RM'mil RM'mil 700.0 Term Loan 310.8 349.51 600.0 Commercial Papers (CP) / 2 Revolving Loans (RL) 800.0 574.8 500.0 Unrated MTNs 1,000.0 1,000.0 400.0 374.8 Total Gross Borrowings 1,924.3 300.0 Discount on Commercial Papers - 200.0 349.5 400.
Slide 14: 3. 2Q 2015 Portfolio Performance
3. 2Q 2015 Portfolio Performance Driving values through sustainable growth 14
Slide 15: 2Q 2015 Revenue Contribution
2Q 2015 Revenue Contribution 2Q 2015 (RM'mil) 114.0 2Q 2014 (RM'mil) 110.3 Retail Hotel Office Others 80.0 69.8 70.0 64.7 60.0 50.0 40.0 30.0 20.0 10.3 8.9 9.6 10.9 10.0 5.1 5.6 4.5 4.3 5.0 4.8 1.2 1.1 1.4 1.4 1.4 2.0 3.2 4.1 2.5 2.3 - 0.2 - Sunway Sunway SCI Sunway Sunway Resort Pyramid Sunway Hote
Slide 16: 2Q 2015 Revenue Contribution (Cont'd)
2Q 2015 Revenue Contribution (Cont’d) * Explanation: 1 Sunw ay Pyramid – Strong gross revenue grow th of 7.9% or RM5.1 million for 2Q 2015 compared to 2Q 2014 primarily at tributable to the double digit rental reversion (for a 3-year term) achieved for the renew al/new t enancies in FYE2014 of 1,033
Slide 17: 2Q 2015 Revenue Contribution (Cont'd)
2Q 2015 Revenue Contribution (Cont’d) By sector By property Others Office 4.4% 8.9% Sunway Sunway Medical Putra Tower Centre Sunway Tower 4.4% 2.8% 2.2% Hotel Menara Sunway 15.4% 3.9% Sunway Putra Hotel 1.2% Retail 71.3% Sunway Hotel Seberang Jaya Pyramid 1.2% Tower Hotel 4.5% Sunway Resort Hotel &
Slide 18: YTD 2Q 2015 Revenue Contribution
YTD 2Q 2015 Revenue Contribution YTD 2Q 2015 (RM'mil) 227.8 YTD 2Q 2014 (RM'mil) 210.5 Retail Hotel Office Others 160.0 138.9 140.0 125.0 120.0 100.0 80.0 60.0 40.0 20.9 17.5 18.7 17.7 20.0 10.6 10.7 9.0 8.6 10.0 9.5 6.8 8.3 5.1 4.7 2.5 2.3 0.2 0.4 2.6 2.3 2.5 3.5 - Sunway Sunway SCI Sunway Sunway R
Slide 19: YTD 2Q 2015 Revenue Contribution (Cont'd)
YTD 2Q 2015 Revenue Contribution (Cont’d) Explanation:* 1 Sunw ay Pyramid, Sunw ay Carnival, SCI Hypermarket, Sunw ay Putra Mall, Sunw ay Putra Hot el, Menara Sunw ay, Sunw ay Tow er, Sunw ay Putra Tow er and Sunw ay Medical Center – As per explanation on page 16. 2 Sunw ay Resort Hot el & Spa and P
Slide 20: YTD 2Q 2015 Revenue Contribution (Cont'd)
YTD 2Q 2015 Revenue Contribution (Cont’d) By sector By property Others Sunway Medical 4.4% Sunway Office Centre 9.2% Putra Tower Sunway Tower 4.4% 2.2% 3.0% Hotel Menara Sunway 15.1% 4.0% Sunway Putra Hotel 1.1% Retail 71.3% Sunway Hotel Seberang Jaya Pyramid 1.1% Tower Hotel 4.7% Sunway Resort Hote
Slide 21: 2Q 2015 NPI Contribution
2Q 2015 NPI Contribution NPI Margin 2Q 2015 (RM'mil) 86.7 76.1% 2Q 2014 (RM'mil) 84.4 76.5% Retail Hotel Office Others 55.0 50.0 45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 - (5.0) Sunway Sunway Sunway Sunway Sunway SCI Sunway Pyramid Hotel Sunway Menara Sunway Sunway Resort Hotel Medical Pyramid Ca
Slide 22: 2Q 2015 NPI Contribution (cont'd)
2Q 2015 NPI Contribution (cont’d) Explanation: 1 Sunw ay Pyramid and Sunw ay Carnival – Higher NPI due to reasons mentioned on page 16, partially offset by the 17% electricity t ariff hike w ith effect from January 2014 (3Q 2014). In addition, Sunw ay Pyramid also incurred higher general maintenance
Slide 23: 2Q 2015 NPI Contribution (Cont'd)
2Q 2015 NPI Contribution (Cont’d) By sector By property Others Office 5.8% Sunway Sunway Medical 7.7% Sunway Tower Putra Tower Centre 2.3% 1.7% 5.7% Menara Sunway Hotel 3.6% 19.3% Sunway Putra Hotel Retail 1.4% 67.2% Sunway Hotel Pyramid Seberang Jaya Tower Hotel 1.6% 5.7% Sunway Resort Sunway Pyram
Slide 24: YTD 2Q 2015 NPI Contribution
YTD 2Q 2015 NPI Contribution NPI Margin YTD 2Q 2015 (RM'mil) 173.2 76.0% YTD 2Q 2014 (RM'mil) 161.5 76.7% Retail Hotel Office Others 120.0 100.0 80.0 60.0 40.0 20.0 - (20.0) Sunway Sunway Hotel Sunway Sunway Sunway SCI Sunway Pyramid Sunway Menara Sunway Sunway Resort Hotel Seberang Medical Pyramid
Slide 25: YTD 2Q 2015 NPI Contribution (cont'd)
YTD 2Q 2015 NPI Contribution (cont’d) Explanation: 1 Sunw ay Pyramid and Sunw ay Carnival – As per explanation on page 22. Sunw ay Carnival also made a higher provision for doubtful debts for YTD 2Q 2015. 2 Sunw ay Putra Mall – Higher net property loss in YTD 2Q 2015 due to higher pre-opening expens
Slide 26: YTD 2Q 2015 NPI Contribution (Cont'd)
YTD 2Q 2015 NPI Contribution (Cont’d) By sector Others By property Office 5.8% 8.0% Sunway Sunway Medical Sunway Tower Putra Tower Centre 2.5% 1.8% 5.7% Hotel 19.4% Menara Sunway 3.7% Retail Sunway 66.8% Putra Hotel 1.5% Sunway Hotel Pyramid Seberang Jaya Tower Hotel 1.5% 5.9% Sunway Resort Hotel &
Slide 27: Resilient Income Stream
RESILIENT INCOME STREAM Well spread-out lease expiry profile and diverse tenant base WALE 1 as at 30 December 2014– 2.28 years Top 10 tenants comprise approximately 14.2% Projected tenancy expiry of portfolio 2 Top 10 tenants³ Total Top 10 Tenants 14.2% 70.0% 4 Ranhill Worley Parsons Sdn Bhd 2.6% 60
Slide 28: 4. 2Q 2015 Property Performance
4. 2Q 2015 Property Performance Driving values through sustainable growth 28
Slide 29: Retail Properties: Sunway Pyramid Shopping Mall
RETAIL PROPERTIES SUNWAY PYRAMID SHOPPING MALL Historical occupancy rates Projected lease expiry schedule Average occupancy rate 60% 50% 100.0% 99.3% 98.5% 98.6% 98.3% 97.8% 97.9% 97.5% 40% 95.0% 30% 90.0% 20% 85.0% 10% 80.0% 8.4% 21.6% 51.7% 14.9% 1.4% 0% FY2015 FY2016 FY2017 FY2018 Monthly 75.0% t
Slide 30: 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 12.1% Aeon Co (M) Bhd 2.2% 22.2% Parkson Corporation Sdn Bhd 1.7% 38.0% TGV Cinemas Sdn Bhd 1.5% 6.7% Sunway Resort Hotel Sdn Bhd (Convention Centre) 1.2% 4.4% Padini Dot Com Sdn Bhd 1.0% 5.2% 4.5%
Slide 31: Retail Properties: Sunway Carnival Shopping Mall
RETAIL PROPERTIES SUNWAY CARNIVAL SHOPPING MALL Historical occupancy rates Projected lease expiry schedule Average occupancy rate 40% 35% 100.0% 98.4% 30% 97.4% 25% 95.0% 93.6% 92.8% 92.0% 91.2% 20% 90.6% 90.0% 15% 85.0% 10% 5% 80.0% 11.7% 26.8% 50.8% 6.2% 0.6% 0% FY2015 FY2016 FY2017 FY2018 Monthly
Slide 32: 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 24.5% Parkson Corporation Sdn Bhd 9.2% 22.4% 26.3% Life Habitat Sdn Bhd 2.5% Sam's Groceria Sdn Bhd 2.3% 9.1% Sunway Hotel (SJ) Sdn Bhd (Convention Centre) 2.3% 17.7% Apex Pal (M) Sdn Bhd 1.5% 8.5
Slide 33: Retail Properties: Suncity Ipoh Hypermarket
RETAIL PROPERTIES SUNCITY IPOH HYPERMARKET Historical occupancy rates Average occupancy rate 100% 100% 100% 100% 100% 100% 100% 100% 95% 90% 85% 80% 75% Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 YTD2Q YTD2Q 15 14 Suncity Ipoh Hypermarket is tenanted to a single tenant, a major hypermarket and retailer chai
Slide 34: Hospitality Properties: Sunway Resort Hotel & Spa
HOSPITALITY PROPERTIES SUNWAY RESORT HOTEL & SPA Historical occupancy rate Average occupancy rate (%) Average occupancy rate 85.0% 83.5% 85.0% 81.0% 82.1% 80.9% 81.1% 78.8% 80.0% 76.0% 80.0% 77.3% 75.0% 71.3% 69.4% 75.0% 70.0% 66.7% 72.4% 65.0% 70.0% 60.0% 55.0% 65.0% 50.0% 60.0% Jun-10 Jun-11 Jun-1
Slide 35: Hospitality Properties: Pyramid Tower Hotel
HOSPITALITY PROPERTIES PYRAMID TOWER HOTEL Historical occupancy rate Average occupancy rate (%) Average occupancy rate 100.0% 90.0% 87.8% 95.0% 92.0% 83.1% 82.4% 85.0% 81.3% 80.9% 90.0% 88.5% 78.7% 80.0% 83.7% 85.0% 82.8% 82.2% 75.0% 80.0% 76.0% 70.0% 75.0% 65.0% 70.0% 60.0% 65.0% Jun-10 Jun-11 Jun-
Slide 36: Hospitality Properties: Sunway Hotel Seberang Jaya
HOSPITALITY PROPERTIES SUNWAY HOTEL SEBERANG JAYA Historical occupancy rate Average occupancy rate (%) Average occupancy rate 100.0% 90.0% 80.0% 77.0% 76.6% 90.0% 80.0% 70.2% 81.5% 67.8% 80.0% 77.6% 70.0% 75.7% 68.7% 60.0% 70.0% 51.6% 63.2% 50.0% 60.0% 57.8% 40.0% 50.0% Jun-10 Jun-11 Jun-12 Jun-13 J
Slide 37: Hospitality Properties: Sunway Putra Hotel
HOSPITALITY PROPERTIES SUNWAY PUTRA HOTEL Historical occupancy rate Average occupancy rate (%) Average occupancy rate 70.0% 60.2% 59.0% 60.0% 60.0% 50.0% 42.6% 40.0% 34.0% 51.6% 30.0% 50.0% 20.0% 43.8% 10.0% 0.0% 40.0% 38.8% Jun-12 * Jun-13 Jun-14 YTD2Q 15 36.4% 36.1% Avg occupancy rate (%) 31.6% Cu
Slide 38: Office Properties: Menara Sunway
OFFICE PROPERTIES MENARA SUNWAY Historical occupancy rates Projected lease expiry schedule Average occupancy rate 70% 60% 99.7% 100.0% 98.5% 98.9% 98.8% 98.6% 97.7% 97.4% 50% 95.0% 40% 90.0% 30% 20% 85.0% 10% 80.0% 16.3% 69.3% 11.1% 0% 75.0% FY2015 FY2016 FY2017 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 YT
Slide 39: Office Properties: Menara Sunway (Cont'd)
OFFICE PROPERTIES MENARA SUNWAY (Cont’d) Tenant mix Top 10 tenants 1.8% Total Top 10 Tenants 81.1% 1.8% 8.2% 2.9% Sunway Management Sdn Bhd 15.5% 2.9% 28.2% Sunway Integrated Properties Sdn Bhd 15.0% 6.6% Maxis Mobile Sdn Bhd 13.8% Sunway Construction Sdn Bhd 9.4% 12.3% Sunway Shared Services Sdn Bh
Slide 40: Office Properties: Sunway Tower
OFFICE PROPERTIES SUNWAY TOWER Historical occupancy rates Projected lease expiry schedule Average occupancy rate 90% 80% 70% 100.0% 97.0% 95.6% 95.0% 93.5% 60% 90.0% 50% 87.3% 84.3% 85.0% 83.0% 40% 80.0% 30% 75.0% 20% 69.8% 70.0% 10% 56.60% 3.10% 3.70% 65.0% 0% FY2015 FY2016 FY2017 60.0% Jun-10 Jun-
Slide 41: Office Properties: Sunway Tower (Cont'd)
OFFICE PROPERTIES SUNWAY TOWER (Cont’d) Tenant mix Top 10 tenants 2.2% 3.3% 2.2% Total Top 10 Tenants 98.9% 2.7% Ranhill Worley Parsons Sdn Bhd 75.4% 2 3.8% Intecsea Sdn Bhd 6.4% 4.0% Royal Danish Embassy 4.0% ACCA Malaysia Sdn Bhd 3.8% WRP Asia Pacific Sdn Bhd 2.7% Zhuojian Associates S/B 2.2% 81.8
Slide 42: Office Properties: Sunway Putra Tower
OFFICE PROPERTIES SUNWAY PUTRA TOWER Historical occupancy rates Projected lease expiry schedule Average occupancy rate 70% 60% 100.0% 98.7% 50% 95.0% 40% 90.0% 30% 85.2% 85.0% 20% 80.0% 78.0% 1 76.1% 10% 74.2% 74.9% 75.0% 45.3% 14.4% 15.7% 0% 70.0% FY2015 FY2016 FY2017 65.0% Jun-11 Jun-12 Jun-13 Jun
Slide 43: Office Properties: Sunway Putra Tower (Cont'd)
OFFICE PROPERTIES SUNWAY PUTRA TOWER (Cont’d) Tenant mix Top 10 tenants 0.7% 0.7% Total Top 10 Tenants 100.0% 1.4% 2 1.8% Suruhanjaya Koperasi Malaysia 60.0% Kementerian Perdagangan Dalam Negeri Koperasi Dan Kepenggunaan Malaysia 20.8% Jabatan Perdana Menteri (I.C.U) 5.0% Jabatan Pengairan & Saliran
Slide 44: 5. Market Outlook
5. Market Outlook Driving values through sustainable growth 44
Slide 45: General Outlook
General Outlook o The global economy is projected to register modest grow th of 3.5% 1 in CY2015, underpinned by firm grow th trajectory in the U.S. How ever, persistent w eakness in the Eurozone, China and Japan may pose a dow nside risk to global grow th. o The pace of grow th for the Malaysian ec
Slide 46: General Outlook
General Outlook o Based on consensus forecast2 as at 8 January 2015, OPR is projected to increase by 25bps to 3.50% in CY2015. o The Manager expects modest growth in distribution per unit (“DPU”) in FY2015 with Sunway Putra Mall expected to be reopened in 4QFY2015. o The Manager is committed to dist
Slide 47: Retail
Retail o Retail Group Malaysia (“RGM”) has forecasted retail sales growth of 6.5% in 4Q CY2014. Retail sales are expected to increase in the domestic sector in 4Q CY2014, partially driven by an expected increase in consumer spending, in anticipation of the impending implementation of the GST in Apri
Slide 48: Retail (Cont'd)
Retail (Cont’d) o Sunway Pyramid Shopping Mall continued to enjoy high occupancy. For the first six months of FY2015, average occupancy rate was stable at 97.9% compared to 97.5% during the same period in the preceding year. A total of 263,233 sq.ft. of net lettable space (“NLA”) was renewed for yea
Slide 49: Hotel
Hotel o Tourist arrivals for the first 8-month of CY2014 recorded a double-digit growth of 10.3% year- on-year to 18.4 million, primarily contributed by ASEAN and Middle East nations. On an annualized basis, this is on track to meet The Tourism and Culture Minister’s target of 28.0 million for CY201
Slide 50: Hotel (Cont'd)
Hotel (Cont’d) o The average occupancy rate for Sunway Putra Hotel slipped to 31.6% in 2Q2015 (58.0% based on number of saleable rooms) compared to 51.6% in 2Q2014 (52.0% based on number of saleable rooms), due to ongoing major refurbishment at the adjoining Sunway Putra Mall and the hotel’s ongoing
Slide 51: Office
Office o With the constant incoming office supply, w ith a total of 3.74 million sq.ft and 1.78 million sq.ft. of office space expected to be completed in CY2015 and CY2016 respectively. This is expected to adversely impact the older office buildings in terms of occupancy and rental rates. In view o
Slide 52: Office (Cont'd)
Office (Cont’d) o In tandem with the developments in Sunway Tower and Sunway Putra Tower, the Manager expects lower income contribution from the office segment for FY2015. On the portfolio level, we do not expect a material adverse impact on our FY2015 DPU. Driving values through sustainable growth
Slide 53: 6. Investor Relations
6. Investor Relations Driving values through sustainable growth 53
Slide 54: Unit Price Performance (IPO to December 2014)
Unit Price Performance (IPO to 31 December 2014) Unit Price Performance of Sunway REIT versus Performance Statistics* Benchmarks (8 July 2010 – 31 December 2014) 90.0% TR/GPR/APREA Price : RM0.90 Composite REIT (as at 8/7/2010) 80.0% Index Malaysia 81.0% Closing Price : RM1.52 70.0% (as at 31/12/201
Slide 55: Unit Price Performance (YTD 2Q2015)
Unit Price Performance (YTD 2Q2015) Unit Price Performance of Sunway REIT versus Performance Statistics* Benchmarks (30 June 2014 – 31 December 2014) 14.0% Price : RM1.44 12.0% TR/GPR/APREA (as at 30/6/2014) 10.0% Composite REIT Index Malaysia Closing Price : RM1.52 8.0% 7.1% (as at 31/12/2014) 6.0%
Slide 56: Unitholders' Composition (as at 31 December 2014)
Unitholders’ Composition (as at 31 December 2014) Retail Foreign 11.2% Sunway 19.5% Berhad 35.7% Institutions Domestic 53.1% 80.5% o Total number of unitholders has reduced from 8,942 as at 30 September 2014 to 8,579 as at 31 December 2014 o Retail participation eased from 11.9% as at 30 September 2
Slide 57: Comparative Yields for Various Assets
Comparative Yields for Various Assets 8.0% 7.0% 6.84% 2 6.35% 4 6.0% 5.72% 1 5.0% 4.08% 2 4.0% 3.31% 3 3.25% 5 3.0% 2.0% 1.0% 0.0% Sunway REIT M-REIT 10-Year MGS Fixed Deposit EPF Yield OPR Note: 1. Distribution yield based on consensus DPU forecast of 8.7 sen 2. Information as at 31 December 2014 (
Slide 58: Thank You
THANK YOU Driving values through sustainable growth
Sunway Real Estate Investment Trust — Q2 FY2015 Earnings Presentation on 6ix