Sunway Real Estate Investment Trust · MYX:SUNREIT

Sunway Real Estate Investment Trust — 1Q FY2015 Earnings Presentation

50 slides from Sunway Real Estate Investment Trust's earnings presentation, Nov 6, 2014

  1. Slide 1: Sunway REIT Financial Results 1st Quarter Ended 30 September 2014

    SUNWAY REIT Financial Results 1 st Quarter Ended 30 September 2014 (FYE 30 June 2015) Announcement Date: 6 November 2014

  2. 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

  3. Slide 3: Table of Contents

    Table of Contents 1. Financial Highlights & Key Updates 2. 1Q 2015 Financial Results 3. 1Q 2015 Portfolio Performance 4. 1Q 2015 Property Performance 5. Market Outlook 6. Investor Relations Driving values through sustainable growth 3

  4. Slide 4: 1. Financial Highlights & Key Updates

    1. Financial Highlights & Key Updates Driving values through sustainable growth 4

  5. Slide 5: Distribution Details

    Distribution Details Dividend Distribution Details Distribution Period 1 July 2014 - 30 September 2014 1 Distribution per Unit (DPU) (sen) 2.28 Notice of Entitlement 6 November 2014 Ex-Dividend Date 19 November 2014 Book Closure Date 21 November 2014 Payment Date 4 December 2014 1 Proposed income di

  6. Slide 6: Financial Highlights

    Financial Highlights Highlights 1Q 2015 1Q 2014 Change % No. of Properties 12 12 0.0% Property Value (RM'billion) 5.559 5.203 6.8% No. of Units in Circulation 2,930,983,100 2,921,426,900 0.3% Unit Price as at 30 Sept (RM) 1.53 1.42 7.7% Market Capitalisation (RM'billion) 4.484 4.148 8.1% Net Asset V

  7. Slide 7: Financial Highlights (Cont'd)

    Financial Highlights (Cont’d) Gross Revenue (RM'm) Net Property Income (RM'm) 450.0 350.0 400.0 300.0 350.0 250.0 300.0 1 250.0 13.6% 200.0 12.2% 2 200.0 150.0 150.0 100.0 113.8 86.5 77.1 100.2 100.0 50.0 50.0 - - 1Q 1Q 2015 2014 2015 2014 1 Gross revenue increased 13.6% or RM13.6 million contribute

  8. Slide 8: Financial Highlights (Cont'd)

    Financial Highlights (Cont’d) Profit Before Tax (Realised) (RM'm) DPU (sen) 250.0 5.0% 9.00 8.00 200.0 7.00 150.0 1 6.00 2 14.5% 14.0% 5.00 100.0 4.00 63.4 3.00 2.28 55.4 50.0 2.00 2.00 1.00 - - 1Q 1Q 2015 2014 2015 2014 1 PBT(Realised) increased by 14.5% or RM8.0 million mainly due to higher net pr

  9. Slide 9: Key Updates

    Key Updates Material litigation After the Federal Court has on 20 February 2012 dismissed Metroplex Holdings Sdn Bhd' s (“ MHSB” ) application for leave to appeal, RHB Trustees 12.7% Berhad (as trustee of Sunw ay REIT) (" Trustee" ) and Sunw ay REIT Management Sdn Bhd (" Manager" ) proceeded w ith t

  10. Slide 10: 2. 1Q 2015 Financial Results

    18.1% 2. 1Q 2015 Financial Results Driving values through sustainable growth 10

  11. Slide 11: Statement of Comprehensive Income – Consolidated

    Statement of Comprehensive Income – Consolidated 1Q 2015 1Q 2014 Change YTD 2015 YTD 2014 Change RM'000 RM'000 % RM'000 RM'000 % Gross revenue 113,812 100,176 13.6% 113,812 100,176 13.6% Less : Property operating expenses (27,320) 1 (23,070) 18.4% (27,320) (23,070) 18.4% Net property income 86,492 7

  12. Slide 12: Statement of Financial Position – Consolidated

    Statement of Financial Position – Consolidated 30.09.14 30.06.14 RM'000 RM'000 ASSETS Non-current assets Plant and equipment 3,354 3,039 Investment properties 5,558,894 5,520,000 5,562,248 5,523,039 Current assets Receivables, deposits and prepayments 20,399 16,361 Cash and bank balances 80,597 54,6

  13. Slide 13: Debt Profile

    Debt Profile Facility Limit RM'mil Loan Maturity Profile (RM'mil) RM'mil Term Loan 310.8 327.11 600.0 Commercial Papers/Revolving 2 500.0 Loans 700.0 488.3 400.0 Unrated MTNs 1,000.0 1,000.0 300.0 Total Gross Borrowings 1,815.4 488.3 200.0 400.0 400.0 Discount on Commercial Papers - 327.1 Total Borr

  14. Slide 14: 3. 1Q 2015 Portfolio Performance

    3. 1Q 2015 Portfolio Performance Driving values through sustainable growth 14

  15. Slide 15: 1Q/YTD 2015 Revenue Contribution

    1Q/YTD 2015 Revenue Contribution 1Q/YTD 2015 (RM'mil) 113.8 1Q/YTD 2014 (RM'mil) 100.2 Retail Hotel Office Others 80.0 69.1 70.0 60.3 60.0 50.0 40.0 30.0 20.0 10.6 8.6 9.1 10.0 6.8 5.5 5.1 5.0 4.7 4.5 4.3 3.6 4.2 2.6 2.4 1.2 1.2 0.2 0.2 1.2 0.9 1.2 1.5 - Sunway Sunway SCI Sunway Sunway Resort Pyrami

  16. Slide 16: 1Q/YTD 2015 Revenue Contribution (Cont'd)

    1Q/YTD 2015 Revenue Contribution (Cont’d) * Explanation: 1 Sunw ay Pyramid – Strong gross revenue grow th f or 1Q 2015 of 14.6% or RM8.8 million compared to 1Q 2014 primarily attributable to higher rental pursuant to the major renew al/new tenancies in FYE2014 w hereby 1,033,523 sq.f t. w as renew e

  17. Slide 17: 1Q/YTD 2015 Revenue Contribution (Cont'd)

    1Q/YTD 2015 Revenue Contribution (Cont’d) By sector By property Others Office 4.4% Sunway Sunway Medical 9.4% Putra Tower Centre Sunway Tower 2.3% 4.4% 3.2% Hotel Menara Sunway 4.0% 14.9% Sunway Putra Hotel 1.1% Retail Sunway Hotel 71.3% Seberang Jaya Pyramid 1.0% Tower Hotel 4.8% Sunway Resort Hote

  18. Slide 18: 1Q/YTD 2015 NPI Contribution

    1Q/YTD 2015 NPI Contribution NPI Margin 1Q/YTD 2015 (RM'mil) 86.5 76.0% 1Q/YTD 2014 (RM'mil) 77.1 76.9% 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 Medica

  19. Slide 19: 1Q/YTD 2015 NPI Contribution (cont'd)

    1Q/YTD 2015 NPI Contribution (cont’d) Explanation: 1 As explained in Slide 16. 2 Sunw ay Putra Mall – Low er net property loss in 1Q 2015 compared to 1Q 2014 due to reversal of overprovision for assessment for KL properties pursuant to confirmation of final increase, offset by higher pre-opening exp

  20. Slide 20: 1Q/YTD 2015 NPI Contribution (Cont'd)

    1Q/YTD 2015 NPI Contribution (Cont’d) By sector Others By property Office 5.8% 8.3% Sunway Sunway Medical Putra Tower Centre Sunway Tower 5.7% Hotel 1.9% 2.6% 19.4% Menara Sunway 3.7% Retail Sunway 66.5% Putra Hotel 1.6% Sunway Hotel Pyramid Seberang Jaya Tower Hotel 1.4% 6.2% Sunway Resort Sunway P

  21. Slide 21: Resilient Income Stream

    RESILIENT INCOME STREAM Well spread-out lease expiry profile and diverse tenant base WALE 1 as at 30 September 2014– 2.3 years Top 10 tenants comprise approximately 14.9% Projected tenancy expiry of portfolio 2 Top 10 tenants³ 70.0% Total Top 10 Tenants 14.9% 4 Ranhill Worley Parsons Sdn Bhd 3.3% 60

  22. Slide 22: 4. 1Q 2015 Property Performance

    4. 1Q 2015 Property Performance Driving values through sustainable growth 22

  23. Slide 23: 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% 98.0% 97.0% 40% 95.0% 30% 90.0% 20% 85.0% 10% 80.0% 20.3% 21.8% 51.5% 2.1% 2.4% 0% FY2015 FY2016 FY2017 FY2018 Monthly 75.0% t

  24. Slide 24: 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 12.3% 22.0% Aeon Co (M) Bhd 2.3% Parkson Corporation Sdn Bhd 1.7% 37.7% TGV Cinemas Sdn Bhd 1.5% 6.5% Sunway Resort Hotel Sdn Bhd (Convention Centre) 1.2% 4.3% Padini Dot Com Sdn Bhd 1.0% 5.3% 4.6%

  25. Slide 25: Retail Properties: Sunway Carnival Shopping Mall

    RETAIL PROPERTIES SUNWAY CARNIVAL SHOPPING MALL Historical occupancy rates Projected lease expiry schedule 40% Average occupancy rate 35% 30% 99.5% 100.0% 97.4% 25% 95.0% 93.6% 93.9% 20% 92.0% 91.2% 90.6% 90.0% 15% 10% 85.0% 5% 80.0% 20.3% 26.2% 52.1% 0.6% 0.3% 0% FY2015 FY2016 FY2017 FY2018 Monthly

  26. Slide 26: 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 23.5% Parkson Corporation Sdn Bhd 9.4% 21.7% 27.2% Sam's Groceria Sdn Bhd 2.4% Sunway Hotel (SJ) Sdn Bhd (Convention Centre) 2.3% 9.7% CYC Sega Leisure World (M) Sdn Bhd 1.5% Jet Line Avenue Sdn B

  27. Slide 27: Retail Properties: Suncity Ipoh Hypermarket

    RETAIL PROPERTIES SUNCITY IPOH HYPERMARKET Historical occupancy rates Average occupancy rate 100% 100% 100% 100% 100% 100% 100% 95% 90% 85% 80% 75% Jun-11 Jun-12 Jun-13 Jun-14 YTD1Q YTD1Q 15 14 Suncity Ipoh Hypermarket is tenanted to a single tenant, a major hypermarket and retailer chain operating

  28. Slide 28: 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% 82.1% 78.8% 80.9% 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% Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 60

  29. Slide 29: Hospitality Properties: Pyramid Tower Hotel

    HOSPITALITY PROPERTIES PYRAMID TOWER HOTEL Historical occupancy rate Average occupancy rate (%) Average occupancy rate 90.0% 88.5% 85.0% 83.1% 82.4% 81.3% 80.9% 85.0% 83.7% 78.7% 82.8% 82.2% 80.0% 80.0% 75.0% 76.0% 75.0% 70.0% 70.0% 65.0% 65.0% 60.0% Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 60.0% Avg occu

  30. Slide 30: 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% 90.0% 80.0% 70.2% 81.5% 67.8% 80.0% 77.6% 70.0% 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 Jun-14 Avg oc

  31. Slide 31: Hospitality Properties: Sunway Putra Hotel

    HOSPITALITY PROPERTIES SUNWAY PUTRA HOTEL Historical occupancy rate Average occupancy rate (%) Average occupancy rate 80.0% 70.0% 60.2% 59.0% 60.0% 70.0% 50.0% 42.6% 40.0% 60.0% 30.0% 20.0% 51.6% 10.0% 50.0% 43.8% 0.0% 2 Jun-12 * Jun-13 Jun-14 38.8% 40.0% 36.4% 36.1% Avg occupancy rate (%) Customer

  32. Slide 32: 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% 98.5% 97.7% 97.7% 50% 95.0% 40% 90.0% 30% 20% 85.0% 10% 80.0% 17.7% 68.3% 11.1% 0% FY2015 FY2016 FY2017 75.0% Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 YT

  33. Slide 33: 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

  34. Slide 34: Office Properties: Sunway Tower

    OFFICE PROPERTIES SUNWAY TOWER Historical occupancy rates Projected lease expiry schedule Average occupancy rate 90% 80% 100.0% 70% 97.0% 95.6% 95.0% 93.5% 60% 88.3% 50% 90.0% 84.3% 40% 85.0% 83.0% 30% 80.0% 76.1% 20% 75.0% 10% 70.0% 69.6% 3.1% 3.4% 0% 65.0% FY2015 FY2016 FY2017 60.0% Jun-10 Jun-11

  35. Slide 35: Office Properties: Sunway Tower (Cont'd)

    OFFICE PROPERTIES SUNWAY TOWER (Cont’d) Tenant mix Top 10 tenants 1.9% 1.8% 2.6% 2.3% Total Top 10 Tenants 99.4% 3.2% 2 Ranhill Worley Parsons Sdn Bhd 79.6% 3.3% Intecsea Sdn Bhd 5.4% Royal Danish Embassy 3.3% ACCA Malaysia Sdn Bhd 3.2% WRP Asia Pacific Sdn Bhd 2.3% Zhuojian Associates S/B 1.9% 84.9

  36. Slide 36: 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 76.9% 10% 74.2% 75.0% 73.1% 45.3% 14.4% 15.7% 0% 70.0% FY2015 FY2016 FY2017 65.0% Jun-11 Jun-12 Jun-13 Jun

  37. Slide 37: Office Properties: Sunway Putra Tower (Cont'd)

    OFFICE PROPERTIES SUNWAY PUTRA TOWER (Cont’d) Tenant mix Top 10 tenants 0.7% 0.8% 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 mMenteri (I.C.U) 5.0% Jabatan Pengairan & Salira

  38. Slide 38: 5. Market Outlook

    5. Market Outlook Driving values through sustainable growth 38

  39. Slide 39: General Outlook

    General Outlook o 2Q CY2014 GDP grew 6.4% YoY (1Q CY2014: 6.2% YoY) w hich lifted Malaysia’s GDP growth to 6.3% for the 1H2014, compared with 5.5% in the corresponding period last year. Bank Negara Malaysia (“BNM”) expects GDP growth to moderate slightly in the second half of the year. Private secto

  40. Slide 40: Retail

    Retail o According to the Malaysian Institute Economic Research (“MIER”)’s retail trade survey report, the Hari Raya celebration was expected to drive up retail sales in the 3Q of the year. It, however, pointed out that the increase in the OPR (in July to 3.25%) could affect retail sales of bigger i

  41. Slide 41: Retail (Cont'd)

    Retail (Cont’d) o Sunway Carnival Shopping Mall’s average occupancy rate increased to 99.5% in 1QFY2015 from 93.9% in 1QFY2014 due to the tenancy commencement of Sam’s Groceria occupying about 44,000 sq.ft. which was vacant since July 2013. o The refurbishment of Sunway Putra Mall is at 88% completi

  42. Slide 42: Hotel

    Hotel o Tourist arrivals in the 7-month CY2014 recorded a growth of 9.7% y-o-y to 16.1 million, helped by higher tourist arrivals from neighboring countries, Australia, South Korea and Middle Eastern market. The Tourism and Culture Minister is confident that the ministry would achieve its target of

  43. Slide 43: Office

    Office o With supply continued to outpace demand, the average occupancy rate of office in Kuala Lumpur is expected to be in the region of 80% to 81% betw een end of 2014 and 2016. The majority of landlords maintained their rental for 1H2014, how ever those w ith relatively low occupancy rate are mor

  44. Slide 44: Office (Cont'd)

    Office (Cont’d) in June 2014. The Manager expects the occupancy rate to improve gradually upon reopening of Sunway Putra Mall and completion of its own upgrading works by mid-2015 due to its competitive rates. o In view of the challenging business operating environment arising from the oversupply si

  45. Slide 45: 6. Investor Relations

    6. Investor Relations Driving values through sustainable growth 45

  46. Slide 46: Unit Price Performance (IPO to September 2014)

    Unit Price Performance (IPO to 30 September 2014) Unit Price Performance of Sunway REIT versus Performance Statistics* Benchmarks (8 July 2010 – 30 September 2014) 90.0% Price : RM0.90 TR/GPR/APREA (as at 8/7/2010) Composite REIT 80.0% Index Malaysia 81.2% Closing Price : RM1.53 70.0% (as at 30/9/20

  47. Slide 47: Unit Price Performance (YTD 1Q2015)

    Unit Price Performance (YTD 1Q2015) Unit Price Performance of Sunway REIT versus Performance Statistics* Benchmarks (30 June 2014 – 30 September 2014) 8.00% Price : RM1.44 (as at 30/6/2014) 6.00% TR/GPR/APREA Closing Price : RM1.53 Composite REIT (as at 30/9/2014) Index Malaysia 7.3% Highest Price :

  48. Slide 48: Unitholders' Composition (as at 30 September 2014)

    Unitholders’ Composition (as at 30 September 2014) Retail 9.5% Foreign Sunway 19.6% Berhad 34.6% Domestic 80.4% Institutions 55.9% o Total number of unitholders has reduced from 9,581 (as at 30 June 2014) to 9,256 (as at 30 September 2014). o Retail participation eased marginally from 9.6% as at 30

  49. Slide 49: Comparative Yields for Various Assets

    Comparative Yields for Various Assets 8.0% 7.0% 6.71% 2 6.35% 4 6.0% 5.70% 1 5.0% 3.92% 2 4.0% 3.30% 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 30 September 2014

  50. Slide 50: Thank You

    THANK YOU Driving values through sustainable growth

Sunway Real Estate Investment Trust — 1Q FY2015 Earnings Presentation on 6ix