Sunway Real Estate Investment Trust · MYX:SUNREIT
Sunway Real Estate Investment Trust — Q2 FY2014 Earnings Presentation
52 slides from Sunway Real Estate Investment Trust's earnings presentation, Jan 24, 2014
Slide 1: Sunway REIT Financial Results 2nd Quarter Ended 31 December 2013
Sunway REIT Financial Results 2 nd Quarter Ended 31 December 2013 (FYE 30 June 2014) Announcement Date: 24 January 2014
Slide 2: Disclaimer
Disclaimer This presentation may contain certain forward looking statements due to a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions; interest rate trends; cost of capital and capital avail
Slide 3: Table of Contents
Table of Contents 1. Highlights & Key Updates 2. 2Q 2014 Financial Results 3. 2Q 2014 Portfolio Performance 4. 2Q 2014 Property Performance 5. Market Outlook 6. Investor Relations Driving values through sustainable growth 3
Slide 4: 1. Highlights & Key Updates
1. Highlights & Key Updates Driving values through sustainable growth 4
Slide 5: Distribution Details
Distribution Details Dividend Distribution Details Distribution Period 1 October 2013 - 31 December 2013 1 Distribution per Unit (DPU) (sen) 2.23 Notice of Entitlement 24 January 2014 Ex-Dividend Date 10 February 2014 Book Closure Date 12 February 2014 Payment Date 27 February 2014 1 Proposed income
Slide 6: Financial Highlights
Financial Highlights Highlights 2Q 2014 2Q 2013 Change % No. of Properties 12 12 0.0% Property Value (RM'billion) 5.229 4.961 5.4% No. of Units in Circulation 2,923,685,000 2,700,625,900 8.3% Unit Price as at 31 Dec (RM) 1.24 1.55 -20.0% Market Capitalisation (RM'billion) 3.625 4.186 -13.4% Net Asse
Slide 7: Financial Highlights (Cont'd)
Financial Highlights (Cont’d) Gross Revenue Net Property Income 250.0 200.0 1 2 4.2% 8.1% 210.5 205.6 161.5 200.0 151.0 150.0 150.0 100.0 110.3 105.8 84.4 78.1 100.0 100.2 99.8 77.1 72.9 50.0 50.0 - - 1Q 2Q YTD 1Q 2Q YTD 2014 2013 2014 2013 1 Gross Revenue increased 4.2% despite loss of income contr
Slide 8: Financial Highlights (Cont'd)
Financial Highlights (Cont’d) Income Before Taxation (Realised) DPU 150.0 1 5.00 10.5% 1.8% 4.23 4.22 117.4 108.1 4.00 100.0 3.00 62.0 2.23 2.19 56.1 50.0 2.00 55.4 2.00 2.03 52.0 1.00 - - 1Q 2Q YTD 1Q 2Q YTD 2014 2013 2014 2013 1 Income Before Taxation (Realised) increased by 10.5% or RM5.9 million
Slide 9: Key Updates
Key Updates Winding up petition against Metroplex Holdings Sdn Bhd The solicitors for RHB Trustees Berhad (formerly know n as OSK Trustees Berhad) (as trustee of Sunw ay REIT) (“ Trustee” ) and Sunw ay REIT Management Sdn Bhd (“ Manager” ) had on 2 August 2012, issued a section 218 Companies Act n
Slide 10: 2. 2Q 2014 Financial Results
2. 2Q 2014 Financial Results Driving values through sustainable growth 10
Slide 11: Statement of Comprehensive Income – Consolidated
Statement of Comprehensive Income – Consolidated 2Q 2014 2Q 2013 Change YTD 2014 YTD 2013 Change RM'000 RM'000 % RM'000 RM'000 % Gross revenue 110,313 105,820 4.2% 210,489 205,592 2.4% Less : Property operating expenses (25,888) (27,697) 6.5% (48,958) (54,589) 10.3% Net property income 84,425 78,123
Slide 12: Statement of Financial Position – Consolidated
Statement of Financial Position – Consolidated 31.12.13 30.06.13 RM'000 RM'000 ASSETS Non-current assets Plant and equipment 1,418 1,283 Investment properties 5,229,440 5,184,000 Derivative financial instrument 20,581 7,540 5,251,439 5,192,823 Current assets Receivables, deposits and prepayments 17,
Slide 13: Debt Profile
Debt Profile Facility Limit RM'mil RM'mil Loan Maturity Profile (RM'mil) Term Loan 310.8 328.11 450.0 Commercial Papers/Revolving 400.0 Loans 2 500.0 366.0 350.0 Unrated MTNs 1,000.0 1,000.0 300.0 Total Gross Borrowings 1,694.1 250.0 Discount on Commercial Papers - 200.0 366.0 400.0 400.0 Total Borr
Slide 14: 3. 2Q 2014 Portfolio Performance
3. 2Q 2014 Portfolio Performance Driving values through sustainable growth 14
Slide 15: 2Q 2014 Revenue Contribution
2Q 2014 Revenue Contribution 2Q 2014 (RM'mil) 110.3 2Q 2013 (RM'mil) 105.8 Retail Hotel Office Others 70.0 64.7 1 60.2 60.0 50.0 40.0 30.0 20.0 4 2 8.9 7.9 10.9 9.5 5 10.0 6.3 5.6 5.8 8 7 4.3 4.2 4.1 3.9 4.8 1.1 1.1 0.2 3 6 1.4 0.7 2.0 4.0 2.3 2.1 0.1 - Sunway Sunway SCI Sunway Sunway Pyramid Sunway
Slide 16: YTD 2Q 2014 Revenue Contribution
YTD 2Q 2014 Revenue Contribution YTD 2Q 2014 (RM'mil) 210.5 YTD 2Q 2013 (RM'mil) 205.6 Retail Hotel Office Others 140.0 1 125.0 118.3 120.0 100.0 80.0 60.0 40.0 1 3 17.5 15.4 17.7 17.8 3 6 20.0 12.8 10.7 11.5 9.5 2 4 5 6.0 8.6 8.3 8.3 7.8 4.7 2.3 2.3 0.4 2.3 1.0 3.5 4.3 0.1 - Sunway Sunway SCI Sunwa
Slide 17: 2Q 2014 Revenue Contribution
2Q 2014 Revenue Contribution By sector Others By property Office 4.4% 9.7% Sunway Medical Sunway Centre Putra Tower Sunway Tower 4.4% Hotel 2.1% 3.7% Menara Sunway 18.0% 3.9% Retail Sunway Putra Hotel 67.9% 1.8% Sunway Hotel Seberang Jaya Pyramid 1.3% Tower Hotel 5.1% Sunway Resort Hotel Sunway Pyra
Slide 18: YTD 2Q 2014 Revenue Contribution
YTD 2Q 2014 Revenue Contribution By sector Others 4.5% Office By property 10.3% Sunway Medical Sunway Centre Hotel Putra Tower 16.2% Sunway Tower 4.5% 2.2% Retail 3.9% Menara Sunway 69.0% 4.1% Sunway Putra Hotel 1.7% Sunway Hotel Seberang Jaya Pyramid 1.1% Tower Hotel 5.1% By location Sunway Resort
Slide 19: 2Q 2014 NPI Contribution
2Q 2014 NPI Contribution NPI Margin 2Q 2014 (RM'mil) 84.4 76.5% 2Q 2013 (RM'mil) 78.1 73.8% Retail Hotel Office Others 45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 - (5.0) Sunway Sunway SCI Sunway Pyramid Sunway Sunway Sunway Sunway Sunway Resort Hotel Menara Sunway Hypermar Putra Tower Putra Putra M
Slide 20: YTD 2Q 2014 NPI Contribution
YTD 2Q 2014 NPI Contribution NPI Margin YTD 2Q 2014 (RM'mil) 161.5 76.7% YTD 2Q 2013 (RM'mil) 151.0 73.4% Retail Hotel Office Others 100.0 80.0 60.0 40.0 20.0 - (20.0) Sunway Sunway SCI Sunway Pyramid Sunway Sunway Sunway Sunway Sunway Resort Hotel Menara Sunway Hypermar Putra Tower Putra Putra Medi
Slide 21: 2Q 2014 NPI Contribution
2Q 2014 NPI Contribution By sector Others Office 5.7% By property 8.5% Sunway Sunway Medical Putra Tower Centre Sunway Tower 1.4% 5.6% Hotel 3.3% Retail 22.6% Menara Sunway 63.2% 3.8% Sunway Putra Hotel 2.0% Sunway Hotel Seberang Jaya 1.5% Pyramid Tower Hotel 6.5% Sunway Pyramid By location 56.0% Ip
Slide 22: YTD 2Q 2014 NPI Contribution
YTD 2Q 2014 NPI Contribution By sector Others By property Office 5.9% Sunway Medical 9.1% Sunway Centre Putra Tower 5.8% Sunway Tower 1.6% Hotel 3.5% Menara Sunway 20.2% Retail 3.9% 64.8% Sunway Putra Hotel 1.7% Sunway Hotel Seberang Jaya Pyramid 1.3% Tower Hotel 6.4% Sunway Pyramid By location 57.4
Slide 23: Resilient Income Stream
RESILIENT INCOME STREAM Well spread-out lease expiry profile and diverse tenant base WALE 1 as at 31 December 2013 – 2.7 years Top 10 tenants comprise approximately 16.4% Projected tenancy expiry of portfolio 2 Top 10 tenants 70.0% Total Top 10 Tenants 16.4% 63.6% Ranhill Worley Parsons Sdn Bhd 3.9%
Slide 24: 4. 2Q 2014 Property Performance
4. 2Q 2014 Property Performance Driving values through sustainable growth 24
Slide 25: Retail Properties: Sunway Pyramid Shopping Mall
RETAIL PROPERTIES SUNWAY PYRAMID SHOPPING MALL Historical occupancy rates Projected lease expiry schedule Average occupancy rate 50% 45% 40% 100.0% 99.3% 99.0% 98.5% 98.6% 98.3% 97.9% 97.5% 35% 95.0% 30% 25% 90.0% 20% 15% 85.0% 10% 80.0% 5% 6.0% 23.5% 21.0% 46.4% 2.1% 0% 75.0% FY2014 FY2015 FY2016 F
Slide 26: 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 13.0% Aeon Co (M) Bhd 2.4% 21.7% Parkson Corporation Sdn Bhd 1.8% 38.2% Padini Dot Com Sdn Bhd 1.8% 6.4% TGV Cinemas Sdn Bhd 1.6% 4.3% Sunway Resort Hotel Sdn Bhd 1.2% 5.3% (Convention Centre) 4.8%
Slide 27: 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% 30% 97.4% 96.1% 25% 95.0% 93.6% 92.8% 91.8% 91.2% 20% 90.6% 90.0% 15% 85.0% 10% 5% 80.0% 13.0% 17.0% 25.5% 36.0% 0.2% 0% 75.0% FY2014 FY2015 FY2016 FY2017
Slide 28: 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 23.9% Parkson Corporation Sdn Bhd 10.5% 23.5% 26.1% Sunway Carnival Convention Centre 2.6% CYC Sega Leisure World (M) Sdn Bhd 1.5% 9.8% Apex Pal (M) Sdn Bhd 1.5% 18.9% Golden Screen Cinema 1.4% 4.
Slide 29: 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-09 Jun-10 Jun-11 Jun-12 Jun-13 YTD YTD 2Q 2Q 2014 2013 Suncity Ipoh Hypermarket is tenanted to a single tenant, a major hypermarket and retaile
Slide 30: Hospitality Properties: Sunway Resort Hotel & Spa
HOSPITALITY PROPERTIES SUNWAY RESORT HOTEL & SPA Historical occupancy rate (Q on Q) Average occupancy rate (%) Average occupancy rate 85.0% 83.5% 78.0% 80.0% 76.0% 75.0% 71.3% 80.0% 69.4% 70.0% 66.7% 75.0% 72.4% 72.7% 65.0% 61.0% 71.9% 70.8% 69.5% 60.0% 70.0% 55.0% 65.0% 50.0% Jun-09 Jun-10 Jun-11 J
Slide 31: Hospitality Properties: Pyramid Tower Hotel
HOSPITALITY PROPERTIES PYRAMID TOWER HOTEL Historical occupancy rate (Q on Q) Average occupancy rate (%) Average occupancy rate 90.0% 88.5% 83.1% 82.2% 85.0% 81.3% 80.9% 78.8% 78.7% 80.0% 85.0% 82.6% 75.0% 80.0% 78.1% 77.9% 70.0% 76.0% 75.8% 65.0% 75.0% 60.0% 70.0% Jun-09 Jun-10 Jun-11 Jun-12 Jun-13
Slide 32: Hospitality Properties: Sunway Hotel Seberang Jaya
HOSPITALITY PROPERTIES SUNWAY HOTEL SEBERANG JAYA Historical occupancy rate (Q on Q) Average occupancy rate (%) Average occupancy rate 80.0% 90.0% 78.8% 80.0% 77.0% 80.0% 70.2% 70.0% 68.7% 65.8% 70.0% 63.3% 60.0% 51.6% 60.0% 57.8% 50.0% 40.0% 49.5% 50.0% 46.3% Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 YTD
Slide 33: Hospitality Properties: Sunway Putra Hotel
HOSPITALITY PROPERTIES SUNWAY PUTRA HOTEL Historical occupancy rate (Q on Q) Average occupancy rate (%) Average occupancy rate 80.0% 70.0% 60.2% 59.0% 60.0% 70.5% 47.7% 50.0% 70.0% 40.0% 30.0% 60.0% 57.9% 57.0% 20.0% 55.4% 10.0% 51.6% 0.0% 50.0% Jun-12 * Jun-13 YTD 2Q 2014 43.8% Avg occupancy rate (
Slide 34: Office Properties: Menara Sunway
OFFICE PROPERTIES MENARA SUNWAY Historical occupancy rates Projected lease expiry schedule Average occupancy rate 70% 60% 99.7% 99.2% 100.0% 98.5% 98.9% 98.6% 97.3% 97.7% 50% 95.0% 40% 90.0% 30% 20% 85.0% 10% 80.0% 4.0% 17.4% 67.9% 9.8% 0% 75.0% FY2014 FY2015 FY2016 FY2017 Jun-09 Jun-10 Jun-11 Jun-1
Slide 35: Office Properties: Menara Sunway (Cont'd)
OFFICE PROPERTIES MENARA SUNWAY (Cont’d) Tenant mix Top 10 tenants 1.7% Total Top 10 Tenants 79.8% 1.7% 7.9% 2.8% 2.8% Sunway Integrated Properties 15.1% 26.3% Sunway Management Sdn Bhd 14.8% 8.6% Maxis Mobile Sdn Bhd 14.0% Sunway Construction Sdn Bhd 9.0% 11.8% Sunway Shared Services Sdn Bhd 8.3% 2
Slide 36: 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% 85.0% 83.0% 40% 81.8% 80.0% 30% 75.0% 20% 70.0% 10% 67.1% 0.5% 75.8% 2.6% 65.0% 0% FY2014 FY2015 FY2016 60.0% Jun-09 Jun-10
Slide 37: Office Properties: Sunway Tower (Cont'd)
OFFICE PROPERTIES SUNWAY TOWER (Cont’d) Tenant mix Top 10 tenants 2.1% 1.7% 3.9% 2.9% Total Top 10 Tenants 99.2% 3.0% Ranhill Worley Parsons Sdn Bhd 81.5% Intecsea Sdn Bhd 4.9% Royal Danish Embassy 3.0% ACCA Malaysia Sdn Bhd 2.9% WRP Asia Pacific Sdn Bhd 2.1% Zhuojian Associates S/B 1.7% 86.4% R1 In
Slide 38: 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% 85.2% 30% 85.0% 80.0% 78.0% 20% 76.5% 74.9% 75.0% 10% 70.0% 64.4% 3.4% 5.3% 0% 65.0% FY2014 FY2015 FY2016 Jun-11 Jun-12 Jun-13 YTD 2Q YTD 2Q
Slide 39: Office Properties: Sunway Putra Tower (Cont'd)
OFFICE PROPERTIES SUNWAY PUTRA TOWER (Cont’d) Tenant mix Top 10 tenants 1.9% 0.8% 3.6% Total Top 10 Tenants 98.5% 4.1% 0.8% Suruhanjaya Koperasi Malaysia 65.0% Kementerian Perdagangan Dalam Negeri Koperasi dan Kepenggunaan Malaysia 18.3% Suruhanjaya Syarikat Malaysia 4.7% Encore Media Sdn Bhd 2.5% R
Slide 40: 5. Market Outlook
5. Market Outlook Driving values through sustainable growth 40
Slide 41: General Outlook
General Outlook o The Malaysian economy expanded by 5.0% in 3Q CY2013 (2QCY 2013: 4.4% ) underpinned by strong domestic demand (3Q CY2013: 8.3% ) and exports turned around to grow at 1.7% in 3QCY 2013 (2Q CY2013: -5.2% ). Bank Negara Malaysia (“ BNM” ) is confident of achieving the Gross Domestic Pr
Slide 42: Retail
Retail o Retail Group Malaysia (“ RGM” ), revised slightly dow nw ards its grow th forecast for 2013 for the retail industry from 6.4% (updated in May 2013) to 6.2% amidst softer consumer sentiment arising from various government subsidy rationalisation measures and policies. The retail industry is
Slide 43: Retail (Cont'd)
Retail (Cont’d) o In the mainland of Penang, Sunw ay Carnival Shopping Mall’ s average occupancy rate dipped to 92.8% for YTD 2Q2014 versus 96.1% for YTD 2Q2013 due to non- renew al by a mini anchor tenant w hich occupied 39,676 sq. ft. in June 2013 due to a change in the tenant’ s business strategy
Slide 44: Hotel
Hotel o YTD 3QCY2013 tourist arrivals has recorded a growth of 3.3% y-o-y to 18.8 million. Tourism activities are likely to pick up further in CY2014 in view of Visit Malaysia Year 2014 (“VMY 2014”). The Ministry of Tourism targets tourist arrivals of 28.0 million for CY2014. The Ministry of Tourism
Slide 45: Hotel (Cont'd)
Hotel (Cont’d) o Sunway Putra Hotel experienced lower average occupancy rate of 51.6% in 2Q2014 versus 70.5% in 2Q2013 due to disruption arising from the ongoing major refurbishment at the adjoining Sunway Putra Mall which commenced in May 2013. o In mainland Penang, Sunw ay Hotel Seberang Jaya’ s a
Slide 46: Office
Office o For YTD 3QCY2013, the cumulative supply of purpose built office space in Kuala Lumpur stood at 83.8 million sq. ft., an increase of 2.6 million sq. ft. from YTD 2Q CY2013. Despite the resiliency in occupancy rate, the oversupply situation leading to demand-supply imbalances w ill put dow nw
Slide 47: 6. Investor Relations
6. Investor Relations Driving values through sustainable growth 47
Slide 48: Unit Price Performance (IPO to December 2013)
Unit Price Performance (IPO to 31 December 2013) Unit Price Performance of Sunway REIT versus Performance Statistics* Benchmarks (8 July 2010 – 31 December 2013) 90.0% TR/GPR/A Price : RM0.90 PREA Composite (as at 8/7/2010) 80.0% REIT Index Malaysia Closing Price : RM1.24 70.0% 55.6% (as at 31/12/20
Slide 49: Unit Price Performance (YTD 2Q2014)
Unit Price Performance (YTD 2Q2014) Unit Price Performance of Sunway REIT versus Performance Statistics* Benchmarks (30 June 2013 – 31 December 2013) 10.0% FBM Price : RM1.54 KLCI (as at 30/6/2013) 5.3% 5.0% Closing Price : RM1.24 (as at 31/12/2013) 0.0% Highest Price : RM1.56 Jun-13 Jul-13 Aug-13 S
Slide 50: Unitholders' Composition (as at 31 December 2013)
Unitholders’ Composition (as at 31 December 2013) Individual 10.6% Foreign 19.9% Sunway Berhad 34.5% Domestic 80.1% Institutions 54.9% o Total number of unitholders has increased from 9,300 (as at 30 September 2013) to 9,820 (31 December 2013) representing an increase of 5.6% . o Retail participatio
Slide 51: Comparative Yields for Various Assets
Comparative Yields for Various Assets 8.0% 7.0% 6.77% 1 6.49% 2 6.15% 5 6.0% 5.0% 4.11% 3 4.0% 3.15% 4 3.00% 3.0% 2.0% 1.0% 0.0% Sunway REIT M-REIT 10-Year MGS Fixed Deposit EPF Yield OPR Not e: 1. Dist ribut ion yield based on annualised DPU of 8.39sen f or t he period 1 July 2013 t o 31 December 2
Slide 52: Thank You
O _ THANK Y a ¥ ie — ae —— _ a —— — ——— _——_ —— tt _— = —_ —— tt i j ; j | | 7 a
Sunway Real Estate Investment Trust — Q2 FY2014 Earnings Presentation on 6ix