Sunway Real Estate Investment Trust · MYX:SUNREIT
Sunway Real Estate Investment Trust — 1Q FY2021 Earnings Presentation
53 slides from Sunway Real Estate Investment Trust's earnings presentation, Nov 23, 2020
Slide 1: Financial Results First Quarter Ended 30 Sept 2020
FINANCIAL FINANCIALRESULTS RESULTS First FirstQuarter QuarterEnded Ended30 30Sept Sept2020 2020 (FYE (FYE3130December June 2021)2021) 23 23Nov Nov2020 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 (1Q2021) 2. Financial Results (1Q2021) 3. Portfolio Performance (1Q2021) 4. Property Development Activities & Assets Enhancement Initiatives 5. Market Outlook 6. Investor Relations Appendix - Property Performance (1Q2021) Empowering Businesses Curating Exp
Slide 4: Financial Highlights (1Q2021)
FINANCIAL HIGHLIGHTS (1Q2021) Empowering Businesses Curating Experiences Enriching Lives 4
Slide 5: Financial Highlights – 1Q2021
Financial Highlights – 1Q2021 Highlights 1Q 2021 1Q 2020 No. of Properties 17 17 Property Value (RM'billion) 8.045 8.059 Units in Circulation 2,945,078,000 2,945,078,000 Unit Price as at 30 Sept (RM) 1.56 1.92 Market Capitalisation (RM'billion) 4.594 5.655 Net Asset Value ("NAV") Per Unit (RM) 1.481
Slide 6: Financial Highlights – 1Q2021 (cont'd)
Financial Highlights – 1Q2021 (cont’d) Reported in RM’000 Gross revenue Gross Revenue for 1Q2021 decreased by 30.8% or RM47.9 million compared to 1Q2020 mainly due to 1Q 2021 107,443 lower rental income generated from both retail and 30.8% hotel segment, induced by the outbreak of COVID-19 pandemic
Slide 7: Financial Results (1Q2021)
FINANCIAL RESULTS (1Q2021) Empowering Businesses Curating Experiences Enriching Lives 7
Slide 8: Statement of Comprehensive Income – Consolidated
Statement of Comprehensive Income – Consolidated 1Q 2021 1Q 2020 Change RM'000 RM'000 % Gross rev enue 107,443 155,352 -30.8% Property operating expenses (39,354) (36,281) 8.5% Net property income 68,089 119,071 -42.8% Interest income 1,500 1 1,032 45.3% Other income 30 91 -67.0% M anager's fees (8,
Slide 9: Statement of Comprehensive Income – Consolidated (notes)
Statement of Comprehensive Income – Consolidated 1 Interest income for 1Q2021 was higher by RM0.5 million contributed by higher short term investment. 2 Manager’s fees was lower in 1Q2021 following the decline in net property income for the quarter. 3 Finance costs for 1Q2021 was lower by RM4.6 mill
Slide 10: Statement of Financial Position – Consolidated
Statement of Financial Position – Consolidated 30.09.2020 30.06.2020 30.09.2020 30.06.2020 (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 8,044,586 1 8,020,233 Investment pr
Slide 11: Statement of Financial Position – Consolidated (notes)
Statement of Financial Position – Consolidated 1 Investment properties has increased by RM24.4 million resulting from on-going capital expenditure mainly for the expansion of Sunway Carnival Shopping Mall (RM13.8 million) and Sunway Resort Hotel refurbishment (RM5.7 million). 2 Trade receivables was
Slide 12: Statement of Cash Flows – Consolidated
Statement of Cash Flows – Consolidated Cumulative Quarter ended 30.09.2020 30.09.2019 1 Net cash from operating activities for 1Q2021 RM'000 RM'000 was RM66.6 million, lower by RM28.9 million OPERATING ACTIVITIES compared to 1Q2020 mainly attributable to Cash receipts from customers 120,109 162,467
Slide 13: Debt Profile as at 30 Sept 2020
Debt Profile as at 30 Sept 2020 Facility Limit Amount RM'million RM'million 1 Revolving Loan (USD95.5m) 373.7 399.3 Commercial Papers (CP) / 2 3,000.0 1,650.0 Revolving Loan (RL) 3 Unrated MTNs 10,000.0 1,400.0 Total Gross Borrowings 3,449.3 Discount on Commercial Paper (0.1) Unamortised transaction
Slide 14: Portfolio Performance (1Q2021)
PORTFOLIO PERFORMANCE (1Q2021) Empowering Businesses Curating Experiences Enriching Lives 14
Slide 15: Revenue & NPI growth in 1Q2021
Revenue & NPI growth in 1Q2021 Reported in RM’million Retail Hotel Office Revenue 26% 88% 1Q2021 77.7 2.8 10.5 1Q2020 105.5 23.7 10.1 3% NPI 94% 1Q2021 44.2 41% 1.2 6.3 1Q2020 10% 75.3 22.0 5.7 The retail segment recorded The hotel segment recorded The office segment recorded gross Notes gross reven
Slide 16: Revenue & NPI growth in 1Q2021 (cont'd)
Revenue & NPI growth in 1Q2021 (cont’d) Reported in RM’million Services Industrial & Others Overall Revenue 31% 1Q2021 14.9 1.5 107.4 1Q2020 14.5 3% 1.5 155.4 NPI 1Q2021 14.9 1.5 68.1 43% 1Q2020 14.5 3% 1.5 119.1 The services segment Sunway REIT Industrial - Shah Revenue of the portfolio Notes contr
Slide 17: 1Q2021 Revenue Contribution (by Property)
1Q2021 Revenue Contribution (by Property) 1Q 2021 1Q 2020 Variance Change By Property RM'mil RM'mil RM'mil % Sunway Pyramid Mall 60.7 80.4 (19.7) -24.5% Sunway Carnival Mall 7.8 11.7 (3.9) -33.3% SunCity Ipoh Hypermarket 0.6 1.1 (0.5) -41.6% Sunway Putra Mall 8.6 12.3 (3.7) -30.2% Sunway Resort Hote
Slide 18: 1Q2021 NPI and NPI Margin Contribution (by Property)
1Q2021 NPI and NPI Margin Contribution (by Property) NPI NPI Margin 1Q 2021 1Q 2020 Variance Change 1Q 2021 1Q 2020 Variance By Property RM'mil RM'mil RM'mil % % % % Sunway Pyramid Mall 36.7 61.2 (24.5) -40.0% 60.5% 76.1% -15.6% Sunway Carnival Mall 3.8 7.3 (3.5) -48.6% 48.1% 62.4% -14.3% SunCity Ip
Slide 19: Key Performance Indicators – 1Q2021
Key Performance Indicators – 1Q2021 Industrial & Retail Hotel Office Services Others 1Q 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 Average 1 Occupancy 94% 94% 34% 80% 77% 77% 100% 100% 100% 100% Rates NPI Margin 68% 71% 91% 93% 58% 56% 100% 100% 100% 100% 1. Excludes Sunway Resort Hotel which
Slide 20: Property Development Activities & Asset Enhancement Initiatives
PROPERTY DEVELOPMENT ACTIVITIES & ASSET ENHANCEMENT INITIATIVES (AEI) (1Q2021) Empowering Businesses Curating Experiences Enriching Lives 20
Slide 21: Property Development Activities
Property Development Activities Expansion of Sunway Carnival Shopping Mall Sunway Resort Hotel Redevelopment Estimated total property development RM 353.0 million RM 260.0 million cost (including land) Cummulative cost incurred from initiation RM 117.9 million RM 9.9 million to YTD 1Q 2021 Duration
Slide 22: General Outlook
General Outlook o International Monetary Fund (IMF) cited that the COVID-19 pandemic has triggered the worst downturn in global economy since the Great Depression in 1930s, the damaging effects brought by the pandemic are unprecedented and the journey to global economy recovery remains highly uncert
Slide 23: General Outlook (cont'd)
General Outlook (cont’d) o The Malaysian economy entered into a technical recession in 3Q CY2020 after recording a gross domestic product (GDP) contraction of 2.7% (2Q CY2020 GDP: -17.1%). That said, the economic condition has improved in 3Q CY2020 compared to 2Q CY2020 due to re-opening of the econ
Slide 24: General Outlook (cont'd)
General Outlook (cont’d) o On 3 November 2020, the Monetary Policy Committee (MPC) of Bank Negara Malaysia (BNM) has maintained the Overnight Policy Rate (OPR) at 1.75%, following a cumulative 125 basis points (bps) reduction in the OPR during the first 7M CY2020. Similarly, the Statutory Reserve Re
Slide 25: Retail Segment
Retail Segment o Retail sales in Malaysia suffered a contraction of 20.2% in 1H CY2020 as the lockdown has caused the worst quarterly experience in the history of Malaysia’s retail industry in 2Q CY2020. The Retail Group Malaysia (RGM) maintains its retail sales forecast of -9.3% in CY2020. The RGM,
Slide 26: Retail Segment (cont'd)
Retail Segment (cont’d) o Against the challenging operating conditions, it is imperative for retail businesses to reinvent their business model through innovation and digitalization to diversify its income base, in line with the changing retail and consumption trend. o In the recent Federal Budget 2
Slide 27: Retail Segment (cont'd)
Retail Segment (cont’d) o The Manager remains cautious on the prospects of the financial performance for the retail segment in the short-term in anticipation of subdued footfall following the extension of CMCO. Based on precedence during the RMCO, our retail segment is likely to gradual recover upon
Slide 28: Hotel Segment
Hotel Segment o The COVID-19 pandemic brought inbound tourism to a virtual standstill and severely dented local consumer sentiment, it has been reported that a significant drop of 68.2% tourist arrivals in 1H CY2020, as compared to previous year. o In July 2020, an average hotel occupancy rate of 21
Slide 29: Hotel Segment (cont'd)
Hotel Segment (cont’d) o In view of the highly challenging operating environment, the Government extended the Wage Subsidy Program for another 3 month to partially alleviate the losses suffered by hotel operators. Meanwhile, MOTAC forecasts a quicker recovery in domestic tourism by 2022 in conjuncti
Slide 30: Office Segment
Office Segment o Following an unprecedented lockdown in March 2020, businesses across the nation experienced the first work-from-home orders which has resulted in accelerated pace in digitalisation. o The COVID-19 experience may shift the trajectory of business operations moving forward. Tenants may
Slide 31: Industrial & Others Segment
Industrial & Others Segment o Malaysia’s Industrial Production Index (IPI) saw a 1% year-on-year growth in September 2020, driven by an increase in the IPI’s manufacturing component, but dragged down by a decline in the electricity segments. However, for the period January to September 2020, IPI ave
Slide 32: Unit Price Performance from IPO to 1Q FY2021
Unit Price Performance from IPO to 1Q FY2021 Unit Price Performance of Sunway REIT versus Benchmarks (8 July 2010 – 30 September 2020) GPR APREA Composite 200.0% REIT Index - Malaysia 141.5% 150.0% Sunway 100.0% REIT 73.3% 50.0% FBM KLCI 14.4% 0.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2
Slide 33: Unit Price Performance for FY2021
Unit Price Performance for FY2021 Unit Price Performance of Sunway REIT versus Benchmarks (1 July 2020 – 30 September 2020) 10.0% 5.0% FBM KLCI 0.0% -0.6% Sunway -5.0% Bursa Malaysia REIT Index REIT -3.6% -3.7% -10.0% Jul 2020 Aug 2020 Sep 2020 Performance Statistics (1 July 2020 – 30 September 2020
Slide 34: 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 35: Unitholders' Composition (as at 30 September 2020)
Unitholders’ Composition (as at 30 September 2020) Foreign Retail 7.8% 5.0% Sunway Berhad 40.9% Institutions & Corporate 54.1 Domestic 92.2% September 2020 June 2020 Q-o-Q Change No of unitholders 20,074 19,189 +885 (4.6%) Retail unitholders 5.0% 4.8% +0.2% Foreign unitholders 7.8% 8.2% -0.4% Sunway
Slide 36: Analysts Recommendation (as at September 2020)
Analysts Recommendation (as at 30 September 2020) 21.8 Target Price as at 30 September 2020 (RM) Upside / Downside to unit price as at 30 September 2020 (%) 16.7 16.7 16.0 15.4 9.0 5.8 5.8 5.8 3.2 1.90 1.82 1.82 1.81 1.80 1.70 1.65 1.65 1.65 1.61 1.57 1.50 1.48 1.45 1.50 0.6 (3.8) (3.8) (5.1) (7.1)
Slide 37: Comparative Yields for Various Assets
Comparative Yields for Various Assets 6.0% 5.71%2 5.45%5 4.94%1 5.0% 4.0% 3.0% 2.67%3 2.0% 1.78%4 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 FY2021 DPU of 7.7 sen and unit price as at 30 September 2020 (Sourc
Slide 38: Appendix: Property Performance (1Q2021)
APPENDIX: PROPERTY PERFORMANCE (1Q2021) Empowering Businesses Curating Experiences Enriching Lives 38
Slide 39: 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% 98.0% 98.2% 97.6% 97.0% 97.3% 40.0% 95.0% 30.0% 90.0% 20.0% 85.0% 80.0% 10.0% 6.6% 75.0% 24.4% 19.8% 43.8% 0.8% 0.0% Jun-17 Jun-18 Jun-19 Jun-20 YTD 1Q YTD 1Q FY2021 FY2022 FY20
Slide 40: Retail Properties – Sunway Carnival Shopping Mall
RETAIL PROPERTIES – Sunway Carnival Shopping Mall Average occupancy rate Projected lease expiry schedule 97.6% 97.3% 97.4% 95.7% 96.2% 40.0% 100.0% 80.6% 80.0% 30.0% 60.0% 20.0% 40.0% 10.0% 20.0% 0.0% 28.0% 18.3% 33.2% 0.8% 0.0% Jun-17 Jun-18 Jun-19 Jun-20 YTD 1Q YTD 1Q FY2021 FY2022 FY2023 Monthly
Slide 41: Retail Properties – SunCity Ipoh Hypermarket
RETAIL PROPERTIES – SunCity Ipoh Hypermarket Average occupancy rate 100% 100% 100% 100% 100% 100% 90% 86% 80% 70% 60% 50% Jun-17 Jun-18 Jun-19 Jun-20 YTD 1Q YTD 1Q 2021 2020 SunCity Ipoh Hypermarket replaced its single tenant which ended on 30 April 2020 with new single tenant TF Value-Mart which co
Slide 42: Retail Properties – Sunway Putra Mall
RETAIL PROPERTIES – Sunway Putra Mall Average occupancy rate Projected lease expiry schedule 60.0% 100.0% 92.9% 92.9% 90.7% 90.4% 89.1% 86.3% 50.0% 80.0% 40.0% 60.0% 30.0% 40.0% 20.0% 20.0% 10.0% 0.0% 50.4% 25.3% 8.0% 5.8% 1.8% 0.0% Jun-17 Jun-18 Jun-19 Jun-20 YTD 1Q YTD 1Q FY2021 FY2022 FY2023 Beyo
Slide 43: Retail Properties – Sunway Clio Retail
RETAIL PROPERTIES – Sunway Clio Retail Average occupancy rate Projected lease expiry schedule 50.0% 100.0% 94.9% 89.7% 40.0% 80.0% 72.4% 65.8% 30.0% 60.0% 49.6% 37.6% 20.0% 40.0% 20.0% 10.0% 46.2% 14.5% 29.7% 4.4% 0.0% 0.0% Jun-17 Jun-18 Jun-19 Jun-20 YTD 1Q YTD 1Q FY2021 FY2022 FY2023 Monthly 2021
Slide 44: Hospitality Properties – Sunway Resort Hotel
HOSPITALITY PROPERTIES – Sunway Resort Hotel Average occupancy rate 100.0% 81.5% 81.5% 80.0% 73.5% 65.4% 60.0% 49.5% 40.0% 20.0% 0.0% Ju n-17 Ju n-18 Ju n-19 Ju n-20 YTD 1Q YTD 1Q 2021 2020 Note 1: The hotel properties are under 10-year master leases. The master lease of Sunway Resort Hotel was rene
Slide 45: Hospitality Properties – Sunway Pyramid Hotel
HOSPITALITY PROPERTIES – Sunway Pyramid Hotel Average occupancy rate 100.0% 82.7% 80.0% 71.4% 68.1% 56.8% 58.7% 60.0% 41.0% 40.0% 20.0% 0.0% Ju n-17 Ju n-18 Ju n-19 Ju n-20 YTD 1Q YTD 1Q 2021 2020 Note: The hotel properties are under 10-year master leases. The master lease of Sunway Pyramid Hotel wa
Slide 46: Hospitality Properties – Sunway Clio Hotel
HOSPITALITY PROPERTIES – Sunway Clio Hotel Average occupancy rate 100.0% 80.0% 74.4% 76.6% 72.3% 71.5% 58.4% 60.0% 39.4% 40.0% 20.0% 0.0% Ju n-17 Ju n-18 Ju n-19 Ju n-20 YTD 1Q YTD 1Q 2021 2020 Note: The hotel properties are under 10-year master leases. The master lease of Sunway Clio Hotel is expir
Slide 47: Hospitality Properties – Sunway Hotel Seberang Jaya
HOSPITALITY PROPERTIES – Sunway Hotel Seberang Jaya Average occupancy rate 100.0% 80.0% 76.4% 74.7% 71.1% 69.6% 60.0% 50.7% 49.4% 40.0% 20.0% 0.0% Ju n-17 Ju n-18 Ju n-19 Ju n-20 YTD 1Q YTD 1Q 2021 2020 Note: The hotel properties are under 10-year master leases. The master lease of Sunway Hotel Sebe
Slide 48: Hospitality Properties – Sunway Putra Hotel
HOSPITALITY PROPERTIES – Sunway Putra Hotel Average occupancy rate 100.0% 80.0% 80.0% 72.8% 68.2% 62.4% 60.0% 48.0% 40.0% 24.8% 20.0% 0.0% Ju n-17 Ju n-18 Ju n-19 Ju n-20 YTD 1Q YTD 1Q 2021 2020 Note: The hotel properties are under 10-year master leases. The master lease of Sunway Putra Hotel is exp
Slide 49: Hospitality Properties – Sunway Hotel Georgetown
HOSPITALITY PROPERTIES – Sunway Hotel Georgetown Average occupancy rate 100.0% 91.8% 87.7% 86.0% 84.5% 80.0% 60.0% 52.6% 40.0% 19.6% 20.0% 0.0% Ju n-17 Ju n-18 Ju n-19 Ju n-20 YTD 1Q YTD 1Q 2021 2020 Note: The hotel properties are under 10-year master leases. The master lease of Sunway Hotel Georget
Slide 50: Office Properties – Menara Sunway
OFFICE PROPERTIES – Menara Sunway Average occupancy rate Projected lease expiry schedule 100.0% 100.0% 98.0% 97.3% 95.9% 94.8% 80.0% 95.0% 93.8% 92.1% 90.0% 60.0% 85.0% 40.0% 80.0% 20.0% 24.3% 64.2% 9.4% 75.0% 0.0% Jun-17 Jun-18 Jun-19 Jun-20 YTD 1Q YTD 1Q FY2021 FY2022 FY2023 2021 2020 The average
Slide 51: Office Properties – Sunway Tower
OFFICE PROPERTIES – Sunway Tower Average occupancy rate Projected lease expiry schedule 18.0% 40.0% 34.0% 15.0% 32.9% 30.4% 30.0% 12.0% 20.7% 21.0% 20.1% 9.0% 20.0% 6.0% 10.0% 3.0% 0.0% 11.1% 17.5% 6.2% 0.3% 0.0% Jun-17 Jun-18 Jun-19 Jun-20 YTD 1Q YTD 1Q FY2021 FY2022 FY2023 Monthly tenancy 2021 202
Slide 52: Office Properties – Sunway Putra Tower
OFFICE PROPERTIES – Sunway Putra Tower Average occupancy rate Projected lease expiry schedule 50.0% 100.0% 85.5% 86.4% 82.0% 82.9% 40.0% 80.0% 60.0% 56.0% 30.0% 40.0% 36.6% 20.0% 20.0% 10.0% 37.1% 42.2% 3.7% 0.0% 0.0% Jun-17 Jun-18 Jun-19 Jun-20 YTD 1Q YTD 1Q FY2021 FY2022 FY2023 2021 2020 The avera
Slide 53: Office Properties – Wisma Sunway
OFFICE PROPERTIES – Wisma Sunway Average occupancy rate Projected lease expiry schedule 100.0% 100.0% 100.0% 60.0% 100.0% 94.1% 86.9% 50.0% 78.3% 80.0% 40.0% 60.0% 30.0% 40.0% 20.0% 20.0% 10.0% 49.6% 26.5% 18.6% 0.0% 0.0% Jun-17 Jun-18 Jun-19 Jun-20 YTD 1Q YTD 1Q FY2021 FY2022 FY2023 2021 2020 The a
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