Sunway Real Estate Investment Trust · MYX:SUNREIT
Sunway Real Estate Investment Trust — Q2 FY2019 Earnings Presentation
57 slides from Sunway Real Estate Investment Trust's earnings presentation, Feb 14, 2019
Slide 1: Financial Results Second Quarter Ended 31 December 2018
FINANCIAL RESULTS Second Quarter Ended 31 December 2018 (FYE 30 June 2019) 14 February 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 (2Q 2019) 2. Financial Results (2Q 2019) 3. Portfolio Performance (2Q 2019) 4. Property Development Activities & Assets Enhancement Initiatives 5. Market Outlook 6. Investor Relations Appendix - Property Performance (2Q 2019) Empowering Businesses Curating
Slide 4: Financial Highlights (2Q 2019)
FINANCIAL HIGHLIGHTS (2Q 2019) 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 October 2018 - 31 December 2018 2.25 2.38 Distribution Per Unit (DPU) (sen) 2.25 Notice of Entitlement 14 February 2019 Ex-Dividend Date 27 February 2019 Book Closure Date 1 March 2019 2Q2019 2Q2018
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 2.05 2.37 2.37 2.37 2.13 4.73 2.38 2.27 2.57 2.28 2.25 2.28 2.27 2.67 2.48 2.12 FY 2 0 1 5 FY 2 0 1 6 FY 2 0 1 7 FY 2 0 1 8 FY 2 0 1 9 5-Year DPU CAGR Annualised Distribution Yield 1.8% 5.4% (FY2019 based on annualised DPU) (Based o
Slide 7: Financial Highlights – 2Q2019
Financial Highlights – 2Q2019 Highlights 2Q 2019 2Q 2018 No. of Properties 16 15 Property Value (RM'billion) 7.347 6.796 No. of Units in Circulation 2,945,078,000 2,945,078,000 Unit Price as at 31 Dec (RM) 1.73 1.90 Market Capitalisation (RM'billion) 5.095 5.596 Net Asset Value (NAV) Per Unit (RM) 1
Slide 8: Financial Highlights – 2Q2019 (Cont’d)
Financial Highlights – 2Q2019 (Cont’d) Reported in RM’000 Gross revenue 2Q 2019 139,500 Gross Revenue for 2Q2019 decreased by 1.4% or RM2.0 million compared to 2Q2018 mainly 1.4% attributable lower contribution from hotel segment mitigated by better performance of the 2Q 2018 141,470 other segments.
Slide 9: Financial Highlights – YTD 2Q2019
Financial Highlights – YTD 2Q2019 Reported in RM’000 Gross revenue YTD 2Q2019 143,741 139,500 283,241 Gross Revenue for YTD 2Q2019 increased by 2.8% 0.2% 0.2% or RM0.5 million compared to YTD 2Q2018 mainly contributed by better performance of all YTD segments except for hotel segment. 2Q2018 141,169
Slide 10: Financial Results (2Q 2019)
FINANCIAL RESULTS (2Q 2019) Empowering Businesses Curating Experiences Enriching Lives 10
Slide 11: Statement of Comprehensive Income – Consolidated
Statement of Comprehensive Income – Consolidated 2Q 2019 2Q 2018 Change YTD 2019 YTD 2018 Change RM'000 RM'000 % RM'000 RM'000 % Gross revenue 139,500 141,470 -1.4% 283,241 282,639 0.2% Property operating expenses (35,275) (38,103) -7.4% (68,502) (68,286) 0.3% Net property income 104,225 103,367 0.8
Slide 12: Notes on Statement of Comprehensive Income
Notes on Statement of Comprehensive Income 1 Interest income for YTD 2Q2019 was higher by RM0.9 million mainly contributed by higher investment in money market instrument compared to the preceding year same period. 2 Other income was lower by RM 1.4 million for YTD 2Q2019 primarily attributable to l
Slide 13: Statement of Financial Position – Consolidated
Statement of Financial Position – Consolidated 31.12.18 30.06.18 31.12.18 30.06.18 RM'000 RM'000 RM'000 RM'000 ASSETS Non-current assets Number of units in circulation ('000 units) 2,945,078 2,945,078 Investment properties 7,346,875 1 7,280,225 Plant and equipment 12,193 13,591 Net Asset Value (NAV)
Slide 14: Statement of Financial Position - Consolidated (Cont’d)
Statement of Financial Position - Consolidated (Cont’d) Explanation: 1 Investment properties increased by RM66.7 million as at 31 December 2018 primarily attributed to the refurbishment of grand ballroom, meeting and function rooms of Sunway Resort Hotel & Spa, which were completed in the current qu
Slide 15: Statement of Cash Flows – Consolidated
Statement of Cash Flows – Consolidated Cumulative Quarter ended 31.12.2018 31.12.2017 1 Net cash from operating activities for YTD 2Q2019 was RM'000 RM'000 RM163.1 million, lower by RM14.2 million compared to YTD 2Q2018, mainly due to lower receipt of hotel lease rental OPERATING ACTIVITIES arising
Slide 16: Debt Profile as of 31 December 2018
Debt Profile as of 31 December 2018 Facility Limit Amount Debt Maturity Profile (RM'm) RM'million RM'million 1 Revolving Loan (USD100m) 411.1 394.6 Commercial Papers (CP) / 2 Revolving Loan (RL) 1,600.0 1,500.0 1,350.0 Unrated MTNs 10,000.0 1,000.0 3 Total Gross Borrowings 2,894.6 400.0 394.6 400.00
Slide 17: Portfolio Performance (2Q 2019)
PORTFOLIO PERFORMANCE (2Q 2019) Empowering Businesses Curating Experiences Enriching Lives 17
Slide 18: Revenue & NPI growth in 2Q FY2019
Revenue & NPI growth in 2Q FY2019 Reported in RM’million Retail Hotel Office Revenue 2Q2019 105.3 17.6 23% 9.4 2Q2018 1% 103.8 22.8 7.9 19% NPI 2Q2019 75.9 15.9 27% 5.2 43% 2Q2018 7% 70.9 21.8 3.6 The retail segment recorded The office segment recorded Notes gross revenue of RM105.3 million The soft
Slide 19: Revenue & NPI growth in 2Q 2019 (Cont’d)
Revenue & NPI growth in 2Q 2019 (Cont’d) Reported in RM’million Services Industrial & Others Overall Revenue 5.8 1.4 139.5 1% 2Q2019 2Q2018 5.6 4% 1.4 141.5 NPI 2Q2019 5.8 1.4 104.2 2Q2018 4% 1% 5.6 1.4 103.3 Sunway Medical Centre Revenue and NPI of Sunway Revenue of the portfolio reduced Notes cont
Slide 20: Revenue & NPI growth YTD 2Q 2019
Revenue & NPI growth YTD 2Q 2019 Reported in RM’million Retail Hotel Office Revenue YTD2Q2019 210.2 40.2 12% 18.4 YTD2Q2018 207.4 1% 45.9 15.9 16% NPI YTD2Q2019 153.6 36.4 17% 10.3 YTD2Q2018 149.2 3% 44.0 7.6 34% The retail segment recorded The office segment recorded Notes gross revenue of RM210.2
Slide 21: Revenue & NPI growth in YTD 2Q 2019 (Cont’d)
Revenue & NPI growth in YTD 2Q 2019 (Cont’d) Reported in RM’million Services Industrial & Others Overall Revenue YTD2Q2019 11.6 2.8 283.2 0.2% YTD2Q2018 11.2 4% 2.3 20% 282.7 NPI YTD2Q2019 11.6 2.8 214.7 YTD2Q2018 4% 0.2% 11.2 2.3 20% 214.3 Sunway Medical Centre Revenue and NPI of Sunway The overall
Slide 22: 2Q2019 and YTD 2Q2019 Revenue Contribution (by Property)
2Q2019 and YTD 2Q2019 Revenue Contribution (by Property) YTD 2Q YTD 2Q 2Q 2019 2Q 2018 Variance Change 2019 2018 Variance Change By Property RM'mil RM'mil RM'mil % RM'mil RM'mil RM'mil % Sunway Pyramid Mall 80.7 78.5 2.2 2.8% 161.0 155.7 5.3 3.4% Sunway Carnival Mall 12.0 11.6 0.4 3.1% 23.3 23.5 (0.
Slide 23: 2Q2019 NPI and NPI Margin Contribution (by Property)
2Q2019 NPI and NPI Margin Contribution (by Property) NPI NPI Margin 2Q 2019 2Q 2018 Variance Change 2Q 2019 2Q 2018 Variance By Property RM'mil RM'mil RM'mil % % % % Sunway Pyramid Mall 62.5 56.7 5.9 10.3% 77.5% 72.2% 5.3% Sunway Carnival Mall 7.0 7.0 0.0 0.0% 58.4% 60.1% -1.7% SunCity Ipoh Hypermar
Slide 24: YTD 2Q2019 NPI and NPI Margin Contribution (by Property)
YTD 2Q2019 NPI and NPI Margin Contribution (by Property) NPI NPI Margin YTD 2Q 2019 YTD 2Q 2018 Variance Change YTD 2Q 2019 YTD 2Q 2018 Variance By Property RM'mil RM'mil RM'mil % % % % Sunway Pyramid Mall 126.7 118.8 7.9 6.7% 78.7% 76.3% 2.4% Sunway Carnival Mall 13.8 15.1 (1.4) -9.1% 59.2% 64.4% -
Slide 25: Key Performance Indicators – YTD 2Q2019
Key Performance Indicators – YTD 2Q2019 Industrial & Retail Hotel Office Services Others Average Occupancy 97% 71% 69% 100% 100% Rates NPI Margin 73% 91% 56% 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) (2Q 2019) 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 51.2 million to YTD 2Q 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 50.5 million Cumulative cost incurred from RM 34.3 million initiation to YTD 2Q2019 Duration 4 months from July 2018 Status of completion Completed Empowering
Slide 29: Market Outlook (2Q 2019)
MARKET OUTLOOK (2Q 2019) Empowering Businesses Curating Experiences Enriching Lives 29
Slide 30: General Outlook
General Outlook o The pace of growth in global economies have shed some of its momentum in 2H CY2018 as the impact of major central banks’ monetary tightening policy and intensifying US-China trade tensions began to set in. Global growth in CY2018 is expected to ease marginally to 3.7%, from 3.8% in
Slide 31: General Outlook
General Outlook o On 24 January 2019, the Monetary Policy Committee (MPC) maintained the Overnight Policy Rate (OPR) unchanged at 3.25%. BNM opined that the degree of monetary accommodativeness is consistent with the intended policy stance and will continue to monitor and assess the balance of risks
Slide 32: Retail Segment
Retail Segment o The Retail Group Malaysia (RGM) has raised its 2018 retail sales growth rate forecast for Malaysia’s retail industry from 4.1% to 4.4%, after taking into consideration of the encouraging growth of 6.7% y-o-y in 3Q CY2018 and an upward revision of 4.7% y-o-y growth in 4Q CY2018, from
Slide 33: Hotel Segment
Hotel Segment o Tourist arrivals to Malaysia showed an improvement in 3Q CY2018 of 2.8% y-o-y and 7.2% q-o-q to 6.66 million. Despite the improvement, YTD 9M CY2018 tourist arrivals eased marginally by 0.3% y-o-y to 19.39 million, mainly dragged by Singapore (-15.6% y- o-y) and Brunei (-18.6% y-o-y)
Slide 34: Office Segment
Office Segment o The cumulative supply of office in the Klang Valley stood at 109.7 million sq.ft. as at 3Q CY2018 with 4 new completions thus far in 2018 adding 1.6 million of new supply. It is estimated that a total of 15.7 million sq.ft. are expected to enter the market by the end of CY2021 of wh
Slide 35: Investor Relations (2Q 2019)
INVESTOR RELATIONS (2Q 2019) Empowering Businesses Curating Experiences Enriching Lives 35
Slide 36: Unit Price Performance from IPO to YTD 2Q FY2019
Unit Price Performance from IPO to YTD 2Q FY2019 Unit Price Performance of Sunway REIT versus Benchmarks (8 July 2010 – 31 December 2018) GPR APREA Composite REIT Index - Malaysia 140.0% 132.1% 120.0% 100.0% 80.0% Sunway REIT 60.0% 92.2% 40.0% FBM KLCI 20.0% 28.5% 0.0% Jun 2016 Jun 2017 Jun 2018 Jun
Slide 37: Unit Price Performance for YTD 2Q FY2019
Unit Price Performance for YTD 2Q FY2019 Unit Price Performance of Sunway REIT versus Benchmarks (30 June 2018 – 31 December 2018) 10.0% 8.0% 6.0% 4.0% FBM KLCI 2.0% -0.1% 0.0% Jun 2018 -2.0% Jul 2018 Aug 2018 Sep 2018 Oct 2018 Nov 2018 Dec 2018 Bursa Malaysia REIT Index -4.0% -3.9% -6.0% -8.0% Sunw
Slide 38: Indices Representation
Indices Representation FTSE Bursa Malaysia Mid 70 Index Bursa Malaysia REIT Index1 FTSE4Good Bursa Malaysia Index GPR APREA Composite REIT Index – Malaysia FTSE EPRA NAREIT Global REIT Index FTSE EPRA NAREIT Global Index FTSE EPRA NAREIT Asia ex Japan Index FTSE EPRA NAREIT Asia Paci
Slide 39: Unitholders’ Composition (as at 31 December 2018)
Unitholders’ Composition (as at 31 December 2018) Foreign Retail 8.7% 7.0% Sunway Berhad Institutions 40.9% & Corporate 52.1% Domestic 91.3% December 2018 September 2018 Q-o-Q Change No of unitholders 12,899 12,267 632 (+5.2%) Retail unitholders 7.0% 6.8% +0.2% Foreign unitholders 8.7% 9.1% -0.4% Su
Slide 40: Analysts Recommendation (as at December 2018)
Analysts Recommendation (as at 31 December 2018) 12.7 11.6 Target Price as at 31 December 2018 (RM) 11.0 9.8 9.8 9.2 Upside / Downside to unit price as at 31 8.7 December 2018 (%) 4.5 4.0 1.95 1.93 1.92 1.90 1.90 1.89 1.88 1.85 1.80 1.72 1.70 1.68 1.65 1.65 (0.6) (1.7) (2.9) (4.6) (4.6) UOB Kay Hian
Slide 41: Comparative Yields for Various Assets
Comparative Yields for Various Assets 8.0% 6.90%5 7.0% 6.61%2 6.0% 5.66%1 5.0% 4.07%3 4.0% 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 December 2
Slide 42: Appendix: Property Performance (2Q 2019)
APPENDIX: PROPERTY PERFORMANCE (2Q 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% 99.0% 98.4% 98.1% 98.3% 98.0% 40.0% 95.0% 30.0% 90.0% 20.0% 85.0% 10.0% 80.0% 7.8% 49.7% 28.0% 10.3% 3.2% 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% 98.2% 97.3% 97.6% 97.3% 96.2% 60.0% 94.4% 95.0% 90.0% 40.0% 85.0% 80.0% 20.0% 75.0% Jun-15 Jun-16 Jun-17 Jun-18 YTD 2Q YTD 2Q 13.0% 64.8% 14.2% 5.1% 0.8% 0.0% 2019 2018 FY2019 FY2020 FY2021 F
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 2Q YTD 2Q 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% 50.0% 90.7% 91.0% 89.4% 86.3% 82.4% 80.0% 74.9% 40.0% 60.0% 30.0% 40.0% 20.0% 20.0% 10.0% 11.2% 7.9% 55.9% 8.6% 7.8% 0.0% 0.0% Jun-15 Jun-16 Jun-17 Jun-18 YTD 2Q YTD 2Q FY2019 FY2020 FY2021 FY20
Slide 47: Retail Properties - Sunway Clio Retail
RETAIL PROPERTIES - Sunway Clio Retail Average occupancy rate Projected lease expiry schedule 100.0% 100.0% 94.7% 80.0% 88.6% 80.0% 60.0% 60.0% 43.0% 43.2% 40.0% 40.0% 20.0% 20.0% 3.0% 12.1% 79.7% 1.4% 6.8% 0.0% 0.0% Jun-16 Jun-17 Jun-18 YTD 2Q YTD 2Q FY2019 FY2020 FY2022 Beyond 2019 2018 FY2022 Not
Slide 48: Hospitality Properties - Sunway Resort Hotel & Spa
HOSPITALITY PROPERTIES - Sunway Resort Hotel & Spa Average occupancy rate 90.0% 81.2% 81.5% 82.1% 80.0% 77.9% 73.5% 70.0% 64.2% 60.0% 50.0% Ju n-15 Ju n-16 Ju n-17 Ju n-18 YTD 2Q YTD 2Q 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% 73.2% 71.8% 71.4% 69.0% 70.0% 60.0% 56.8% 50.0% Ju n-15 Ju n-16 Ju n-17 Ju n-18 YTD 2Q YTD 2Q 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% 76.5% 74.4% 72.3% 71.5% 69.9% 70.0% 60.0% 50.0% Ju n-16 Ju n-17 Jun-18 YTD 2Q YTD 2Q 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. The
Slide 51: Hospitality Properties – Sunway Hotel Seberang Jaya
HOSPITALITY PROPERTIES –Sunway Hotel Seberang Jaya Average occupancy rate 80.0% 78.3% 76.4% 76.7% 75.0% 71.1% 69.6% 70.0% 65.5% 65.0% 60.0% Ju n-15 Ju n-16 Ju n-17 Ju n-18 YTD 2Q YTD 2Q 2019 2018 Note 1: The hotel properties are under 10-year master leases. The master lease of Sunway Hotel Seberang
Slide 52: Hospitality Properties - Sunway Putra Hotel
HOSPITALITY PROPERTIES - Sunway Putra Hotel Average occupancy rate 80.0% 75.3% 71.0% 68.0% 63.7% 60.0% 50.2% 40.0% 28.8% 20.0% 0.0% Jun-15 Jun-16 Jun-17 Jun-18 YTD 2Q YTD 2Q 2019 2018 Note 1: The hotel properties are under 10-year master leases. The master lease of Sunway Putra Hotel is expiring in
Slide 53: Hospitality Properties – Sunway Hotel Georgetown
HOSPITALITY PROPERTIES – Sunway Hotel Georgetown Average occupancy rate 100.0% 91.8% 92.4% 90.0% 87.7% 87.5% 80.0% 74.0% 70.0% 70.0% 60.0% Ju n-15 Ju n-16 Ju n-17 Ju n-18 YTD 2Q YTD 2Q 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% 80.0% 94.8% 95.0% 93.8% 93.6% 92.1% 60.0% 90.0% 89.3% 40.0% 85.0% 20.0% 80.0% 67.7% 11.1% 8.7% 7.3% 75.0% 0.0% Jun-15 Jun-16 Jun-17 Jun-18 YTD 2Q YTD 2Q 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% 20.0% 19.6% 9.0% 19.0% 18.2% 6.0% 18.0% 17.0% 3.0% 4.1% 3.8% 9.5% 16.0% 0.0% Jun-16 Jun-17 Jun-18 YTD 2Q YTD 2Q FY2019 FY2020 FY2021 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% 78.1% 30.0% 80.0% 25.0% 60.0% 56.0% 52.8% 20.0% 43.2% 40.0% 36.6% 15.0% 26.4% 10.0% 20.0% 5.0% 16.8% 20.9% 39.2% 1.4% 0.0% 0.0% Jun-15 Jun-16 Jun-17 Jun-18 YTD 2Q YTD 2Q FY2019 FY2020 FY2
Slide 57: Office Properties - Wisma Sunway
OFFICE PROPERTIES - Wisma Sunway Average occupancy rate Projected lease expiry schedule 50.0% 100.0% 40.0% 89.8% 90.1% 90.0% 86.9% 88.2% 80.3% 30.0% 80.0% 78.3% 20.0% 70.0% 60.0% 10.0% 3.0% 18.6% 30.8% 47.4% 50.0% 0.0% Jun-15 Jun-16 Jun-17 Jun-18 YTD 2Q YTD 2Q FY2019 FY2020 FY2021 FY2022 2019 2018 T
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