Sunway Real Estate Investment Trust · MYX:SUNREIT
Sunway Real Estate Investment Trust — Q4 FY2020 Earnings Presentation
58 slides from Sunway Real Estate Investment Trust's earnings presentation, Aug 3, 2020
Slide 1: Financial Results: Fourth Quarter Ended 30 June 2020
FINANCIAL RESULTS Fourth Quarter Ended 30 June 2020 (FYE 30 June 2020) 3 August 2020
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 (4Q2020) 2. Financial Results (4Q2020) 3. Portfolio Performance (4Q2020) 4. Property Development Activities & Assets Enhancement Initiatives 5. Market Outlook 6. Investor Relations Appendix - Property Performance (4Q2020) Empowering Businesses Curating Exp
Slide 4: Financial Highlights (4Q2020)
FINANCIAL HIGHLIGHTS (4Q2020) Empowering Businesses Curating Experiences Enriching Lives 4
Slide 5: Distribution Per Unit (DPU)
Distribution Per Unit (“DPU”) Half-Yearly DPU (sen) Dividend Distribution Details Distribution Period 1 Jan 2020 - 30 June 2020 Distribution Per Unit (DPU) (sen) 2.38 4.86 Notice of Entitlement 3 August 2020 Ex-Dividend Date 17 August 2020 Book Closure Date 18 August 2020 2.38 Payment Date 28 August
Slide 6: 5-Year DPU
5-Year DPU 1Q 2Q 3Q 4Q 9.57 9.59 9.18 9.19 2.15 2.28 2.12 2.27 7.33 2.37 2.37 2.58 2.38 2.37 2.38 2.25 2.45 2.57 2.28 2.12 2.27 2.67 2.48 2.50 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 5-Year DPU CAGR Distribution Yield -3.4% 4.5% (Based on unit price of RM1.62 as at 30 June 2020) Empowering Businesse
Slide 7: Financial Highlights – 4Q2020
Financial Highlights – 4Q2020 Highlights 4Q 2020 4Q 2019 No. of Properties 17 17 Property Value (RM'billion) 8.037 8.047 Units in Circulation 2,945,078,000 2,945,078,000 Unit Price as at 30 June 2020 (RM) 1.62 1.87 Market Capitalisation (RM'billion) 4.771 5.507 Net Asset Value ("NAV") Per Unit (RM)
Slide 8: Financial Highlights – 4Q2020 (Cont'd)
Financial Highlights – 4Q2020 (Cont’d) Reported in RM’000 Gross revenue 4Q 104,925 2020 Gross Revenue for 4Q2020 decreased by 27.9% 27.9% or RM40.6 million compared to 4Q2019 mainly due to rental rebate granted to retail tenants and lease rebate to hotel lessees, impacted by the 4Q 2019 145,559 outb
Slide 9: Financial Highlights – YTD 4Q2020
Financial Highlights – YTD 4Q2020 Reported in RM’000 Gross revenue Gross Revenue for YTD 4Q2020 decreased by YTD 556,875 4.0% or RM23.4 million compared to YTD 4Q2019 4Q2020 155,352 155,798 140,800 104,925 2.8% mainly due to rental rebate granted to retail 4.0% tenants and lease rebate to hotel less
Slide 10: Financial Results (4Q2020)
FINANCIAL RESULTS (4Q2020) Empowering Businesses Curating Experiences Enriching Lives 10
Slide 11: Statement of Comprehensive Income – Consolidated
Statement of Comprehensive Income – Consolidated 4Q 2020 4Q 2019 Change YTD 2020 YTD 2019 Change RM'000 RM'000 % RM'000 RM'000 % Gross revenue 104,925 * 145,559 -27.9% 556,875 * 580,299 -4.0% Property operating expenses (27,320) (34,377) -20.5% (140,066) (140,604) -0.4% Net property income 77,605 11
Slide 12: Statement of Comprehensive Income – Consolidated
Statement of Comprehensive Income – Consolidated 1 Interest income for 4Q2020 was higher by RM0.8 million contributed by higher short term investment compared to 4Q2019. Interest income for YTD 4Q2020 was higher by RM0.2 million mainly due to higher short term investment compared to the preceding ye
Slide 13: Statement of Financial Position – Consolidated
Statement of Financial Position – Consolidated 30.06.20 30.06.19 30.06.20 30.06.19 (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 Investment properties 8,020,233 1 8,047,410 Investment properties
Slide 14: Statement of Financial Position – Consolidated
Statement of Financial Position – Consolidated 1 Investment properties has reduced by RM27.2 million mainly resulting from net fair value loss of RM41.3 million pursuant to annual revaluation in June 2020 and recognition of unbilled lease income receivable of RM16.9 million pursuant to MFRS 16 Lease
Slide 15: Statement of Cash Flows – Consolidated
Statement of Cash Flows – Consolidated Cumulative Quarter ended 30.06.2020 30.06.2019 1 Net cash from operating activities for YTD 4Q2020 RM'000 RM'000 was RM344.9 million, lower by RM54.5 million compared OPERATING ACTIVITIES Cash receipts from customers 562,005 623,639 to YTD 4Q2019 mainly attribu
Slide 16: Debt Profile as at 30 June 2020
Debt Profile as at 30 June 2020 Facility Limit Amount RM'million RM'million Revolving Loan (USD100m) 373.7 395.9 1 Commercial Papers (CP) / 3,000.0 1,650.0 2 Revolving Loan (RL) Unrated MTNs 10,000.0 1,400.0 3 Total Gross Borrowings 3,445.9 Discount on Commercial Paper (0.1) Unamortised transaction
Slide 17: Portfolio Performance (4Q2020)
PORTFOLIO PERFORMANCE (4Q2020) Empowering Businesses Curating Experiences Enriching Lives 17
Slide 18: Revenue & NPI growth in 4Q2020 – Realised
Revenue & NPI growth in 4Q2020 – Realised Reported in RM’million Retail Hotel Office Revenue 49% 53% 4Q2020 4Q2019 4% NPI 58% 4Q2020 58% 4Q2019 10% The retail segment recorded The hotel segment recorded The office segment recorded gross Notes gross revenue of RM54.1 million gross revenue of RM7.0 mi
Slide 19: Revenue & NPI growth in 4Q2020 – Realised (Cont'd)
Revenue & NPI growth in 4Q2020 – Realised (Cont’d) Reported in RM’million Services Industrial & Others Overall Revenue 40% 4Q2020 4Q2019 13% NPI 45% 4Q2020 4Q2019 13% The services segment Sunway REIT Industrial - Shah Revenue of the portfolio Notes contributed revenue and NPI of Alam 1 contributed R
Slide 20: Revenue & NPI growth in YTD 4Q2020 – Realised
Revenue & NPI growth in YTD 4Q2020 – Realised Reported in RM’million Retail Hotel Office Revenue 15% 13% YTD 4Q2020 YTD 4Q2019 9% NPI YTD 4Q2020 20% 13% YTD 4Q2019 12% The retail segment recorded The hotel segment recorded The office segment recorded gross Notes gross revenue of RM364.7 million gros
Slide 21: Revenue & NPI growth in YTD 4Q2020 – Realised (Cont'd)
Revenue & NPI growth in YTD 4Q2020 – Realised (Cont’d) Reported in RM’million Services Industrial & Others Overall Revenue YTD 4Q2020 7% YTD 4Q2019 92% 5% NPI YTD 4Q2020 YTD 4Q2019 9% 92% 5% The services segment Sunway REIT Industrial - Shah Revenue of the portfolio Notes contributed revenue and NPI
Slide 22: 4Q2020 and YTD 4Q2020 Revenue Contribution (by Property)
4Q2020 and YTD 4Q2020 Revenue Contribution (by Property) YTD 4Q YTD 4Q 4Q 2020 4Q 2019 Variance Change 2020 2019 Variance Change By Property RM'mil RM'mil RM'mil % RM'mil RM'mil RM'mil % Sunway Pyramid Mall 41.2 81.3 (40.1) -49.3% 279.0 327.9 (49.0) -14.9% Sunway Carnival Mall 5.5 11.8 (6.3) -53.7%
Slide 23: 4Q2020 NPI and NPI Margin Contribution (by Property)
4Q2020 NPI and NPI Margin Contribution (by Property) NPI NPI Margin 4Q 2020 4Q 2019 Variance Change 4Q 2020 4Q 2019 Variance By Property RM'mil RM'mil RM'mil % % % % Sunway Pyramid Mall 27.6 64.2 (36.5) -56.9% 67.0% 78.9% -11.9% Sunway Carnival Mall 2.0 7.1 (5.1) -71.8% 36.4% 59.9% -23.5% SunCity Ip
Slide 24: YTD 4Q2020 NPI and NPI Margin Contribution (by Property)
YTD 4Q2020 NPI and NPI Margin Contribution (by Property) NPI NPI Margin YTD 4Q 2020 YTD 4Q 2019 Variance Change YTD 4Q 2020 YTD 4Q 2019 Variance By Property RM'mil RM'mil RM'mil % % % % Sunway Pyramid Mall 204.8 256.9 (52.1) -20.3% 73.4% 78.3% -4.9% Sunway Carnival Mall 22.3 27.8 (5.5) -19.8% 56.0%
Slide 25: Key Performance Indicators – YTD 4Q2020
Key Performance Indicators – YTD 4Q2020 Industrial & Retail Hotel Office Services Others YTD 4Q 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 Average Occupancy 95% 96% 53% 69% 78% 72% 100% 100% 100% 100% Rates NPI Margin 68% 73% 91% 91% 58% 55% 100% 100% 100% 100% 1 Empowering Businesses Curat
Slide 26: Property Development Activities & Asset Enhancement Initiatives (AEI)
PROPERTY DEVELOPMENT ACTIVITIES & ASSET ENHANCEMENT INITIATIVES (AEI) (4Q2020) Empowering Businesses Curating Experiences Enriching Lives 26
Slide 27: Expansion of Sunway Carnival Shopping Mall
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 104.2 million to YTD 4Q 2020 Duration Expected completion by CY 2021 Approximately 350,000 sq ft of addi
Slide 28: General Outlook
General Outlook o Globally, lockdowns were at their most intense level from mid-March to mid- May 2020 and it appeared that majority of the nations have troughed in second quarter 2020. The International Monetary Fund (IMF), has revised the global growth projection to a contraction of 4.9% in 2020,
Slide 29: General Outlook (Cont'd)
General Outlook (Cont’d) o The COVID-19 pandemic has driven many countries into the state of recessionary mode. The Malaysia economy avoided a recession with a mild growth of 0.7% in 1Q2020, reflecting the slowdown in economic activities following the implementation of Movement Control Order (MCO) o
Slide 30: General Outlook (Cont'd)
General Outlook (Cont’d) o The Manager remains cautious on the outlook for Sunway REIT in FY2021 due to the uncertainties surrounding global economic recovery. The Manager continues to focus on rebuilding the business segments which have been adversely impacted by the pandemic while strengthening it
Slide 31: Retail Segment
Retail Segment o In a statistics released by the Retail Group Malaysia (RGM), retail sales in Malaysia recorded a decline of 11.4% in the first quarter of 2020, citing that this year has been the worst period for retailers in Malaysia since the Asian Financial Crisis in 1987. o RGM projected the ret
Slide 32: Retail Segment (Cont'd)
Retail Segment (Cont’d) o Retail landscape in Malaysia continues to evolve alongside with global trends albeit at a different pace. This year, the retail landscape has created new opportunities amidst the lockdown and the “new normal” where landlords and retailers jumped into bandwagon and accelerat
Slide 33: Hotel Segment
Hotel Segment o The tourism sector has been paralysed by the COVID-19 pandemic, where tourism related businesses struggled to survive leading to loss of employment and permanent closure of hotels were announced within initial weeks of the MCO. Acknowledging the importance of tourism sector contribut
Slide 34: Hotel Segment (Cont'd)
Hotel Segment (Cont’d) o Going forward, the headwinds surrounding the hotel segment may persist depending on the longevity of the pandemic in the absence of vaccine coupled with ongoing restrictions on cross-border mobility. This may present opportunities for hotels to undertake refurbishment activi
Slide 35: Office Segment
Office Segment o The cumulative supply of office space in the Klang Valley stood at 108.8 million sq.ft. in 1H CY2020 with an additional net lettable area of 1.0 million sq.ft. expected to complete in 2H CY2020. The abundance supply of office space coupled with weak business sentiment will continue
Slide 36: Office Segment (Cont'd)
Office Segment (Cont’d) o The silver lining in the office segment lies in the opportunity for landlords to offer competitive pricing strategy to induce movement of tenants in the market in view that businesses are on cost-containment mode. o This augurs well for office buildings within integrated de
Slide 37: Unit Price Performance from IPO to YTD 4Q FY2020
Unit Price Performance from IPO to YTD 4Q FY2020 Unit Price Performance of Sunway REIT versus Benchmarks (8 July 2010 – 30 June 2020) 200.0% GPR APREA Composite REIT Index - Malaysia 147.9% 150.0% Sunway REIT 80.0% 100.0% 50.0% FBM KLCI 14.1% 0.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20
Slide 38: Unit Price Performance for YTD 4Q FY2020
Unit Price Performance for YTD 4Q FY2020 Unit Price Performance of Sunway REIT versus Benchmarks (1 July 2019 – 30 June 2020) 5.0% 0.0% Jun 2019 Sep 2019 Dec 2019 Mar 2020 Jun 2020 -5.0% FBM KLCI Bursa Malaysia REIT Index -10.2% -10.0% -11.17% -15.0% Sunway REIT -20.0% -13.4% -25.0% -30.0% Performan
Slide 39: Indices Representation
Indices Representation o FTSE Bursa Malaysia Mid 70 Index o FTSE Bursa Malaysia Emas Index o FTSE Bursa Malaysia Top 100 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 40: Unitholders' Composition (as at 30 June 2020)
Unitholders’ Composition (as at 30 June 2020) Foreign Retail 8.2% 4.8% Sunway Berhad Institutions & 40.8% Corporate 54.4% Domestic 91.8% June 2020 March 2020 Q-o-Q Change No of unitholders 19,189 15,276 +3,913 (25.6%) Retail unitholders 4.8% 4.2% +0.6% Foreign unitholders 8.2% 10.9% -2.7% Sunway Ber
Slide 41: Analysts Recommendation (as at June 2020)
Analysts Recommendation (as at 30 June 2020) 20.4 Target Price as at 30 June 2020 (RM) 16.0 Upside / Downside to unit price as at 30 June 2020 (%) 12.3 11.7 12.3 11.1 7.4 6.2 4.9 4.9 1.88 1.95 1.72 1.82 1.81 1.74 1.70 1.82 1.80 1.60 1.65 1.9 1.70 1.50 1.48 1.55 (1.2) (4.3) (7.4) (8.6) UOB Kay Hian A
Slide 42: Comparative Yields for Various Assets
Comparative Yields for Various Assets 7.0% 6.40%2 6.0% 5.45%5 5.0% 4.52%1 4.0% 3.0% 2.86%3 2.03%4 2.0% 1.75%6 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 FY2020 DPU of 7.33 sen and unit price as at 30 June 2020 (Sour
Slide 43: Appendix: Property Performance (4Q2020)
APPENDIX: PROPERTY PERFORMANCE (4Q2020) Empowering Businesses Curating Experiences Enriching Lives 43
Slide 44: Retail Properties - Sunway Pyramid Shopping Mall
RETAIL PROPERTIES - Sunway Pyramid Shopping Mall Projected lease expiry schedule Sunway Pyramid Shopping Mall registered lower gross revenue by RM49.0 million (-14.9%) for YTD 4Q2020 mainly due to rental support to assist tenants affected by restrictions and loss of business during the MCO, CMCO and
Slide 45: Retail Properties - Sunway Carnival Mall
RETAIL PROPERTIES - Sunway Carnival Mall Projected lease expiry schedule Sunway Carnival Mall registered lower gross revenue by RM7.4 million (-15.6%) for YTD 4Q2020 mainly due to rental support to assist tenants affected by restrictions and loss of business during the MCO, CMCO and RMCO effected by
Slide 46: Retail Properties - SunCity Ipoh Hypermarket
RETAIL PROPERTIES - SunCity Ipoh Hypermarket YTD 4Q2020 average occupancy rate of SunCity Ipoh Hypermarket decreased from 100% to 86% due to non-renewal of previous single tenant on 30 April 2020, which was replaced with new single tenant TF Value-Mart on 22 June 2020. Empowering Businesses Curati
Slide 47: Retail Properties - Sunway Putra Mall
RETAIL PROPERTIES - Sunway Putra Mall Projected lease expiry schedule The average occupancy rate at Sunway Putra Mall for YTD 4Q2020 is 2.5% higher compared to YTD4Q2019 due to efforts to enhance occupancy as well as ongoing adjustment in tenant mix. Based on the total NLA of 85,948 sq. ft. due for
Slide 48: Retail Properties - Sunway Clio Retail
RETAIL PROPERTIES - Sunway Clio Retail Projected lease expiry schedule Note : The acquisition was completed on 9 February 2018. The average occupancy rate for Sunway Clio Retail dropped to 72.4% for YTD 4Q2020, due to termination of a non-performing tenant in April 2019 replaced by new tenants in De
Slide 49: Hospitality Properties - Sunway Resort Hotel
HOSPITALITY PROPERTIES - Sunway Resort Hotel Note: The hotel properties are under 10-year master leases. The master lease of Sunway Resort Hotel was renewed from July 2020 to July 2030. The cluster hotels in Sunway City, consisting of Sunway Resort Hotel, Sunway Pyramid Hotel and Sunway Clio Hotel,
Slide 50: Hospitality Properties - Sunway Pyramid Hotel
HOSPITALITY PROPERTIES - Sunway Pyramid Hotel 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 average occupancy rate of Sunway Pyramid Hotel declined 9.4% due to challenging market conditions worsened b
Slide 51: Hospitality Properties - Sunway Clio Hotel
HOSPITALITY PROPERTIES - Sunway Clio Hotel Note: The hotel properties are under 10-year master leases. The master lease of Sunway Clio Hotel is expiring in February 2028. YTD average occupancy rate of Sunway Clio Hotel declined 16.0% due to challenging market conditions worsened by impact of COVID-1
Slide 52: Hospitality Properties - Sunway Hotel Seberang Jaya
HOSPITALITY PROPERTIES - Sunway Hotel Seberang Jaya 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 2030. YTD average occupancy rate of Sunway Hotel Seberang Jaya declined 24.0% due to challenging market co
Slide 53: Hospitality Properties - Sunway Putra Hotel
HOSPITALITY PROPERTIES - Sunway Putra Hotel Note: The hotel properties are under 10-year master leases. The master lease of Sunway Putra Hotel is expiring in September 2021 YTD average occupancy rate of Sunway Putra Hotel declined 14.4% due to challenging market conditions worsened by impact of COVI
Slide 54: Hospitality Properties - Sunway Hotel Georgetown
HOSPITALITY PROPERTIES - Sunway Hotel Georgetown Note: The hotel properties are under 10-year master leases. The master lease of Sunway Hotel Georgetown is expiring in Jan 2025 YTD average occupancy rate of Sunway Hotel Georgetown declined 31.9% due to challenging market conditions worsened by impac
Slide 55: Office Properties - Menara Sunway
OFFICE PROPERTIES - Menara Sunway Projected lease expiry schedule The average occupancy rate at Menara Sunway stood at 97.3% for YTD 4Q2020, with 2.5% increase compared to the preceding year, with the expansion of existing tenant. Based on the total NLA of 44,195sq. ft. which is due for renewal in F
Slide 56: Office Properties - Sunway Tower
OFFICE PROPERTIES - Sunway Tower Projected lease expiry schedule The average occupancy rate at Sunway Tower stood at 32.9% for YTD 4Q2020 (YTD 4Q2019: 20.1%) due to commencement of new tenants. Based on the total NLA of 12,381 sq. ft. which is due for renewal in FY2020, 100% of total space was renew
Slide 57: Office Properties - Sunway Putra Tower
OFFICE PROPERTIES - Sunway Putra Tower Projected lease expiry schedule The average occupancy rate at Sunway Putra Tower improved to 85.5% for YTD 4Q2020 (YTD 4Q2019: 82.0%) following commencement of new tenants. Based on the total NLA of 66,229 sq. ft. which is due for renewal in FY2020, a total of
Slide 58: Office Properties - Wisma Sunway
OFFICE PROPERTIES - Wisma Sunway Projected lease expiry schedule The average occupancy rate at Wisma Sunway improved to 100% for YTD 4Q2020 (YTD 4Q2019: 94.1%) following an expansion of existing tenant. Based on the total NLA of 37,175 sq. ft. which is due for renewal in FY2020, 100% of the total sp
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