Sunway Real Estate Investment Trust · MYX:SUNREIT
Sunway Real Estate Investment Trust — Merger or Acquisition (September 2020)
38 slides from Sunway Real Estate Investment Trust's merger presentation, Sep 17, 2020
Slide 1: Sunway REIT Presentation on the Proposals
Sunway REIT Presentation on the Proposals
Slide 2: Disclaimer
Disclaimer You must read the following before continuing. This presentation is for information purposes only and does not constitute an offer, solicitation to deal in securities or to enter into any legal relations or advertisement or advice or recommendation or invitation with respect to the purcha
Slide 3: Table of contents
Table of contents 1 Overview of the Proposals 4 2 Proposed Acquisition of The Pinnacle Sunway 7 3 Proposed Private Placement 15 4 Proposed Establishment of a DRS 21 Appendix 25 Empowering Businesses Curating Experiences Enriching Lives 3
Slide 4: 1. Overview of the Proposals
1. Overview of the Proposals
Slide 5: Overview of the Proposals
Overview of the Proposals Overview Summary Rationale 1 Proposed Acquisition of The Pinnacle Sunway (“Proposed • Quality addition of Prime Grade A office building to Sunway Acquisition”) REIT’s portfolio • Sale and Purchase Agreement (“SPA”) signed for the acquisition of The Pinnacle Sunway from whol
Slide 6: Approvals Required
Approvals Required The Proposals are subject to the approval of the Unitholders at the Unitholders’ Meeting which is expected to be conducted on 2 October 2020 Approvals Required Approving Authority Bursa Malaysia 1 • For the listing and quotation of the Placement Units on the Main Market of Bursa S
Slide 7: 2. Proposed Acquisition of The Pinnacle Sunway
2. Proposed Acquisition of The Pinnacle Sunway
Slide 8: Overview of The Pinnacle Sunway
Overview of The Pinnacle Sunway An iconic 24-storey Grade A office building, with 3-storey Property Description mezzanine floors and 6 levels of basement car park, GBI- certified and MSC-status Located strategically within the master-planned integrated Location township development of Sunway City Ap
Slide 9: Transaction Rationale
Transaction Rationale 1 Quality addition of a Grade A office asset with reputable tenants to Sunway REIT’s portfolio 2 3 Increase property portfolio Enhances scale and synergies strength through further within the Sunway City eco- diversification system 4 Proposals are Earnings and DPU accretive to
Slide 10: Quality Addition of a Prime Grade A Office
Quality Addition of a Prime Grade A Office Exterior Reception Area Link Bridge Transportation Link • Strategically located at the pulse of Strategically Sunway City’s business activities with Located Transit-Oriented Development (“TOD”) infrastructure connectivity • Seamlessly integrated to Sunway S
Slide 11: Quality Addition of a Prime Grade A Office (Cont'd)
Quality Addition of a Prime Grade A Office (Cont’d) Key Highlights • A 24-storey Grade A office building with 3-storey mezzanine floors and 6 levels of basement car park, GBI-certified, MSC- status and sustainability at its core • A unique corporate environment where it is situated within an interna
Slide 12: Increases Portfolio Strength Through Further Diversification
Increases Portfolio Strength Through Further Diversification Property Value (RM million) indicates years in which acquisitions took place 8,497 8,047 7,280 6,689 6,324 6,433 5,520 5,184 4,630 4,379 3,456 IPO FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2021 Properties Acquired: 9
Slide 13: Increases Portfolio Strength Through Further Diversification (Cont'd)
Increases Portfolio Strength Through Further Diversification (Cont’d) Pre - Proposed Acquisition(1) Post - Proposed Acquisition Number of properties 17 18 GFA (‘000 sqft) 15,739 16,884 1% 1% 11% 11% 6% 11% Portfolio Mix 61% 21% 58% 19% Retail Hotel Office Services Industrial & Others The Proposed Ac
Slide 14: Enhances Scale and Synergies within Sunway City Eco-System
Enhances Scale and Synergies within Sunway City Eco-System Complementary Addition to Sunway REIT’s Existing 7 Assets Within Sunway City • The Pinnacle Sunway will be the 8th asset within Sunway City to be added to the portfolio and will increase the REIT’s exposure to Sunway City from 75.0% to 76.3%
Slide 15: 3. Proposed Private Placement
3. Proposed Private Placement
Slide 16: Indicative Terms of the Proposed Private Placement
Indicative Terms of the Proposed Private Placement Issuer • Sunway Real Estate Investment Trust (“SUNWAY REIT”) • Private Placement of new units of Sunway REIT subject to Unitholders’ approval at the Unitholders’ Type of Offering Meeting Offering Size • Up to RM710.0 million raised via issuance of n
Slide 17: Proposed Utilisation of Proceeds
Proposed Utilisation of Proceeds* A total of RM405.0 million will be used for the Proposed Acquisition and RM295.4 million will be used for the expansion of Sunway Carnival Mall, with the rest being utilized for paying expenses in relation to the Proposals Intended Utilisation of Proceeds 1 2 Propos
Slide 18: Overview of the Expansion of Sunway Carnival Mall
Overview of the Expansion of Sunway Carnival Mall Expansion of Sunway Carnival Mall The expansion of Sunway Carnival Mall (comprising 9 storeys of retail space and 7 levels of carpark) is expected to transform the retail scene in Penang with its appealing architectural design and enhanced tenancy mi
Slide 19: Proforma Effects of the Proposals
Proforma Effects of the Proposals* 1 2 3 DPU * NAV * Reduction in Gearing* (Sen) (RM) 1.50 1.50 7.59 40.7% 37.6% 7.33 As at 30 June 2020 After the Proposals* As at 30 June 2020 After the Proposals* As at 30 June 2020 After the Proposals* (Audited) (Audited) (Audited) Total Distributable Income (RM m
Slide 20: Rationale for the Proposed Private Placement
Rationale for the Proposed Private Placement Rationale Description Partly Finance the DPU- • Placement proceeds will primarily be used to partly finance the Proposed Acquisition, and the Accretive Acquisition and expansion of Sunway Carnival Mall 1 the Expansion of Sunway Carnival • Expected to impr
Slide 21: 4. Proposed Establishment of a Distribution Reinvestment Scheme (DRS)
4. Proposed Establishment of a Distribution Reinvestment Scheme (“DRS”)
Slide 22: Description of the Proposed DRS
Description of the Proposed DRS • The Distribution Reinvestment Scheme (“DRS”) will give unitholders of Sunway REIT an option to re-invest their cash income distribution in new units of Sunway REIT (“DRS Units”) Overview • Unitholders will have an option to invest in whole or in part of their cash d
Slide 23: Rationale for the Proposed DRS Scheme
Rationale for the Proposed DRS Scheme Rationale Description • Provides the Manager with flexibility in managing the REIT’s capital position • The reinvestment of Income Distribution by the Unitholders for DRS Units will also enlarge the unit capital Provides Flexibility base of Sunway REIT 1 in Capi
Slide 24: Proposed DRS Process Flow Chart
Proposed DRS Process Flow Chart Step 1 Step 2 Step 3 • The Board of Directors of the Manager • Sunway REIT despatches the Notice of • Unitholders to decide whether to reinvest the declares an income distribution and Election to Unitholders Electable Portion (in whole or part thereof) determines whet
Slide 25: Appendix 1: Overview of FY2020 and 4QFY20 Results
Appendix 1 Overview of FY2020 and 4QFY20 Results
Slide 26: Financial Highlights – FY2020
Financial Highlights – FY2020 Highlights FY2020 FY2019 No. of Properties 17 17 Property Value (RM million) 8,037 8,047 NAV Per Unit (after income 1.4804 1.4905 distribution)* DPU 7.33 9.59 Gearing 40.7% 37.9% % of Fixed Rate Borrowings 43.0% 45.0% * After proposed final income distribution of 2.38 s
Slide 27: Financial Highlights – 4Q2020
Financial Highlights – 4Q2020 Reported in RM’000 Gross Revenue Gross Revenue for 4Q2020 decreased by 27.9% or RM40.6 million compared to 4Q2019 mainly 4Q2020 104,925 27.9% due to rental rebate granted to retail tenants and lease rebate to hotel lessees, impacted by the outbreak of COVID-19 pandemic
Slide 28: Financial Highlights – FY2020
Financial Highlights – FY2020 Reported in RM’000 Gross revenue Gross Revenue for FY2020 decreased by 4.0% FY2020 556,875 or RM23.4 million compared to FY2019 mainly 155,352 155,798 140,800 104,925 2.8% due to rental rebate granted to retail tenants and 4.0% 4.0% lease rebate to hotel lessees, impact
Slide 29: 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 30: 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 31: Statement of Financial Position – Consolidated
Statement of Financial Position – Consolidated 30.06.20 30.06.19 30.06.20 30.06.20 30.06.19 30.06.19 30.06.20 30.06.19 (Unaudited) (Audited) (Audited) (Audited) (Unaudited) (Audited) (Audited) (Audited) (RM’000) RM'000 (RM’000) RM'000 RM'000 (RM’000) RM'000 (RM’000) ASSETS Non-current assets Units i
Slide 32: 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 33: 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 34: 5-Year DPU
5-Year DPU (Sen) 9.19 9.57 9.59 9.18 2.15 2.28 2.12 2.27 7.33 2.37 2.58 2.38 2.37 2.37 1Q 2Q 2.38 2.25 2.45 3Q 4Q 2.57 2.28 2H 2.27 2.67 2.48 2.50 2.12 FY 2016 FY2017 FY 2018 FY 2019 FY 2020* DPU for 2H2020 was lower by 2.48 sen mainly due to: i. Lower contribution from the retail and hotel segments
Slide 35: Debt Profile as at 30 June 2020
Debt Profile as at 30 June 2020 Facility Limit Amount (RM (RM million) million) Revolving Loan (USD 100m) 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 (0.1) Paper Unamortised Tran
Slide 36: Appendix 2: Market Outlook for Major Property Segments & Glossary
Appendix 2 Market Outlook for Major Property Segments & Glossary
Slide 37: Market Outlook for Major Property Segments
Market Outlook for Major Property Segments Retail Segment Hotel Segment Office Segment Adversely impacted by Covid-19 pandemic Tourism sector has been paralysed by the Relatively more insulated amid Covid-19 as demonstrated by Malaysia’s CY2020 COVID-19 pandemic: pandemic: retail sales statist
Slide 38: COVID-19 Impact – Malaysian Movement Control Orders Timeline
COVID-19 Impact – Malaysian Movement Control Orders Timeline Movement Control Order (“MCO”) 18 March 2020 – 3 May 2020 The Malaysian Government first announced the MCO in March to contain the spread of COVID-19. During this period, only essential services are allowed to operate. All places of wo
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