Sunway Real Estate Investment Trust · MYX:SUNREIT
Sunway Real Estate Investment Trust — Q4 FY2014 Earnings Presentation
55 slides from Sunway Real Estate Investment Trust's earnings presentation, Aug 11, 2014
Slide 1: Sunway REIT Financial Results 4th Quarter Ended 30 June 2014
Sunway REIT Financial Results 4th Quarter Ended 30 June 2014 (FYE 30 June 2014) Announcement Date: 11 August 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. Financial Highlights & Key Updates 2. 4Q 2014 Financial Results 3. 4Q 2014 Portfolio Performance 4. 4Q 2014 Property Performance 5. Market Outlook 6. Investor Relations Driving values through sustainable growth 3
Slide 4: 1. Financial Highlights & Key Updates
1. Financial Highlights & Key Updates Driving values through sustainable growth 4
Slide 5: Distribution Details
Distribution Details Dividend Distribution Details Distribution Period 1 April 2014 - 30 June 2014 1 Distribution per Unit (DPU) (sen) 2.03 Notice of Entitlement 11 August 2014 Ex-Dividend Date 22 August 2014 Book Closure Date 26 August 2014 Payment Date 10 September 2014 1 Proposed income distribut
Slide 6: Financial Highlights
Financial Highlights Highlights 4Q 2014 4Q 2013 Change % No. of Properties 12 12 0.0% Property Value (RM'billion) 5.520 5.184 6.5% No. of Units in Circulation 2,928,714,900 2,919,423,400 0.3% Unit Price as at 30 June (RM) 1.44 1.54 -6.5% Market Capitalisation (RM'billion) 4.217 4.496 -6.2% Net Asset
Slide 7: Financial Highlights (Cont'd)
Financial Highlights (Cont’d) Gross Revenue Net Property Income 2 1 1 Gross revenue increased by 5.1% or RM5.3m despite loss of contribution from Sunway Putra Mall which was closed for major refurbishment since May 2013, mainly contributed by better performance from Sunway Pyramid Shopping Mall and
Slide 8: Financial Highlights (Cont'd)
Financial Highlights (Cont’d) 1 1 Profit Before Tax (Realised) increased by 1.1% or RM0.6m mainly due to higher net property income and interest income coupled with lower trust expenses. Driving values through sustainable growth 8
Slide 9: Key Updates
Key Updates Material litigation After the Federal Court has on 20 February 2012 dismissed Metroplex Holdings Sdn Bhd's application for leave to appeal, RHB Trustees Berhad (as trustee of Sunway REIT) ("Trustee") and Sunway REIT Management Sdn Bhd ("Manager") proceeded with the enforcement of the rem
Slide 10: 2. 4Q 2014 Financial Results
2. 4Q 2014 Financial Results Driving values through sustainable growth 10
Slide 11: Statement of Comprehensive Income – Consolidated
Statement of Comprehensive Income – Consolidated 4Q 2014 4Q 2013 Change YTD 2014 YTD 2013 Change RM'000 RM'000 % RM'000 RM'000 % Gross revenue 109,217 103,906 5.1% 427,788 415,946 2.8% 1 Less : Property operating expenses (30,394) (25,382) -19.7% (106,811) (106,750) -0.1% Net property income 78,823
Slide 12: Statement of Financial Position – Consolidated
Statement of Financial Position – Consolidated 30.06.14 30.06.13 RM'000 RM'000 ASSETS Non-current assets Plant and equipment 3,039 1,283 Investm ent properties 5,520,000 5,184,000 Derivative 1 - 7,540 5,523,039 5,192,823 Current assets Receivables, deposits and prepayments 16,361 18,190 Cash and ban
Slide 13: Debt Profile
Debt Profile Facility Limit RM'mil RM'mil Term Loan 310.8 321.01 Commercial Papers/Revolving 2 Loans 600.0 421.0 Unrated MTNs 1,000.0 1,000.0 Total Gross Borrowings 1,742.0 Discount on Commercial Papers - Total Borrowings at carrying amount 1,742.0 RM'mil Classification of Borrowings: Current (due w
Slide 14: 3. 4Q 2014 Portfolio Performance
3. 4Q 2014 Portfolio Performance Driving values through sustainable growth 14
Slide 15: 4Q 2014 Revenue Contribution
4Q 2014 Revenue Contribution 4Q 2014 (RM'mil) 109.2 4Q 2013 (RM'mil) 103.9 Retail Hotel Office Others 1 2 3 4 5 5 6 7 8 9 10 11 Please refer to next page for explanatory notes. Driving values through sustainable growth 15
Slide 16: 4Q 2014 Revenue Contribution (Cont'd)
4Q 2014 Revenue Contribution (Cont’d) Explanation: 1 Sunway Pyramid – Strong gross revenue growth primarily attributable to higher overall average rental rate (ARR) resulting from renewal/new tenancies whereby 1,033,523 sq. ft. was renewed/replaced with a double digit rental reversion for a 3-year t
Slide 17: YTD 4Q 2014 Revenue Contribution
YTD 4Q 2014 Revenue Contribution YTD 4Q 2014 (RM'mil) 427.8 YTD 4Q 2013 (RM'mil) 415.9 Retail Hotel Office Others 1 1 1 1 2 2 1 3 4 5 1 6 Please refer to next page for explanatory notes. Driving values through sustainable growth 17
Slide 18: YTD 4Q 2014 Revenue Contribution (Cont'd)
YTD 4Q 2014 Revenue Contribution (Cont’d) Explanation: 1 Same reason as in previous slide. 2 Sunway Resort Hotel & Spa and Pyramid Tower Hotel - Sunway Resort Hotel & Spa's performance in YTD 4Q 2014 had improved with a 5.3% growth in revenue or RM1.7 million compared to YTD 4Q 2013, after experienc
Slide 19: 4Q 2014 Revenue Contribution
4Q 2014 Revenue Contribution Driving values through sustainable growth 19
Slide 20: YTD 4Q 2014 Revenue Contribution
YTD 4Q 2014 Revenue Contribution Driving values through sustainable growth 20
Slide 21: 4Q 2014 NPI Contribution
4Q 2014 NPI Contribution NPI Margin 4Q 2014 (RM'mil) 78.8 72.2% 4Q 2013 (RM'mil) 78.5 75.6% Retail Hotel Office Others 1 1 1 2 1 1 1 1 1 3 4 1 5 5 1 As explained in slide 17. 2 Sunway Putra Mall – Net property loss mainly due to quit rent, assessment, insurance and property management reimbursement
Slide 22: YTD 4Q 2014 NPI Contribution
YTD 4Q 2014 NPI Contribution NPI Margin YTD 4Q 2014 (RM'mil) 321.0 75.0% YTD 4Q 2013 (RM'mil) 309.2 74.3% Retail Hotel Office Others 1 2 2 3 4 4 4 4 5 6 1 Sunway Pyramid – Higher NPI attributable to increase in revenue coupled with lower utilities expense in the first half FYE 2014 (prior to the tar
Slide 23: 4Q 2014 NPI Contribution
4Q 2014 NPI Contribution Driving values through sustainable growth 23
Slide 24: YTD 4Q 2014 NPI Contribution
YTD 4Q 2014 NPI Contribution Driving values through sustainable growth 24
Slide 25: Resilient Income Stream
RESILIENT INCOME STREAM Well spread-out lease expiry profile and diverse tenant base WALE 1 as at 30 June 2014– 2.49 years Top 10 tenants comprise approximately 15.5% Projected tenancy expiry of portfolio 2 Top 10 tenants 3 4 1 Calculated based on gross rental income. ³ Based on gross rental income
Slide 26: 4. 4Q 2014 Property Performance
4. 4Q 2014 Property Performance Driving values through sustainable growth 26
Slide 27: Retail Properties: Sunway Pyramid Shopping Mall
RETAIL PROPERTIES SUNWAY PYRAMID SHOPPING MALL Historical occupancy rates Projected lease expiry schedule Note: Lower average occupancy rate for FY 2014 (97.8%) compared to FY 2013 (98.3%) was mainly due to the reconfiguration work for an existing area of 22,096 sq.ft. under Oasis Boulevard 5 Projec
Slide 28: Retail Properties: Sunway Pyramid (Cont'd)
RETAIL PROPERTIES SUNWAY PYRAMID SHOPPING MALL (Cont’d) Tenant mix Top 10 tenants Note: Based on gross rental income for the month of June 2014 28 Driving values through sustainable growth
Slide 29: Retail Properties: Sunway Carnival Shopping Mall
RETAIL PROPERTIES SUNWAY CARNIVAL SHOPPING MALL Historical occupancy rates Projected lease expiry schedule Note: Lower average occupancy rate for FY 2014 (92.0%) compared to FY 2013 (97.4%) was mainly due to non-renewal by a mini anchor tenant in June 2013 with NLA of 39,676 sq. ft. This space will
Slide 30: Retail Properties: Sunway Carnival (Cont'd)
RETAIL PROPERTIES SUNWAY CARNIVAL SHOPPING MALL (Cont’d) Tenant mix Top 10 tenants Note: Based on gross rental income for the month of June 2014 30 Driving values through sustainable growth
Slide 31: Retail Properties: Suncity Ipoh Hypermarket
RETAIL PROPERTIES SUNCITY IPOH HYPERMARKET Historical occupancy rates Suncity Ipoh Hypermarket is tenanted to a single tenant, a major hypermarket and retailer chain operating under the “Giant” brand in Malaysia, Singapore, Indonesia and Brunei Darulsalam. The tenancy was recently renewed in April 2
Slide 32: Hospitality Properties: Sunway Resort Hotel & Spa
HOSPITALITY PROPERTIES SUNWAY RESORT HOTEL & SPA Historical occupancy rate (Q on Q) Average occupancy rate 85.0% 78.8% 80.0% 76.0% 75.0% 71.3% 69.4% 70.0% 66.7% 65.0% 60.0% 55.0% 50.0% Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Avg occupancy rate (%) Customer contribution (Room revenue) Corporate 73.8% Leis
Slide 33: Hospitality Properties: Pyramid Tower Hotel
HOSPITALITY PROPERTIES PYRAMID TOWER HOTEL Historical occupancy rate (Q on Q) Average occupancy rate 85.0% 83.1% 82.4% 81.3% 80.9% 78.7% 80.0% 75.0% 70.0% 65.0% 60.0% Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Avg occupancy rate (%) Customer contribution (Room revenue) Corporate 81.2% Leisure 18.8% Note 1:
Slide 34: Hospitality Properties: Sunway Hotel Seberang Jaya
HOSPITALITY PROPERTIES SUNWAY HOTEL SEBERANG JAYA Historical occupancy rate (Q on Q) Average occupancy rate 90.0% 80.0% 77.0% 80.0% 70.2% 67.8% 70.0% 60.0% 51.6% 50.0% 40.0% Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Avg occupancy rate (%) Customer contribution (Room revenue) Corporate 93.0% Leisure 7.0% No
Slide 35: Hospitality Properties: Sunway Putra Hotel
HOSPITALITY PROPERTIES SUNWAY PUTRA HOTEL Historical occupancy rate (Q on Q) Average occupancy rate 70.0% 59.0% 60.2% 60.0% 50.0% 42.6% 40.0% 30.0% 20.0% 10.0% 0.0% 2 Jun-12 * Jun-13 Jun-14 Avg occupancy rate (%) Customer contribution (Room revenue) Corporate 78.6% Leisure 21.4% Note 1: The hotel pr
Slide 36: Office Properties: Menara Sunway
OFFICE PROPERTIES MENARA SUNWAY Historical occupancy rates Projected lease expiry schedule 36 Driving values through sustainable growth
Slide 37: Office Properties: Menara Sunway (Cont'd)
OFFICE PROPERTIES MENARA SUNWAY (Cont’d) Tenant mix Top 10 tenants Note: Based on gross rental income for the month of June 2014 37 Driving values through sustainable growth
Slide 38: Office Properties: Sunway Tower
OFFICE PROPERTIES SUNWAY TOWER Historical occupancy rates Projected lease expiry schedule 38 Driving values through sustainable growth
Slide 39: Office Properties: Sunway Tower (Cont'd)
OFFICE PROPERTIES SUNWAY TOWER (Cont’d) Tenant mix Top 10 tenants 1 2 Note: Based on gross rental income for the month of June 2014 1 Ranhill’s contribution will drop to approximately 69% upon surrendering approximately 72,000 sq. ft. in FY2015 2 The percentage will drop to 77% when Ranhill surrende
Slide 40: Office Properties: Sunway Putra Tower
OFFICE PROPERTIES SUNWAY PUTRA TOWER Historical occupancy rates Projected lease expiry schedule Note: Lower occupancy rate for FY 2014 (74.2%) compared to FY 2013 (78.0%) was mainly due to non-renewal by a tenant since September 2013. 40 Driving values through sustainable growth
Slide 41: Office Properties: Sunway Putra Tower (Cont'd)
OFFICE PROPERTIES SUNWAY PUTRA TOWER (Cont’d) Tenant mix Top 10 tenants Note: Based on gross rental income for the month of June 2014 41 Driving values through sustainable growth
Slide 42: 5. Market Outlook
5. Market Outlook Driving values through sustainable growth 42
Slide 43: General Outlook
General Outlook o 1Q CY2014 GDP growth picked up to 6.2% YoY (4Q CY2013: 5.1% YoY) underscored by strong domestic demand growth of 7.4% (4Q CY2013: 6.4%) and 14.9% rebound in net external demand (4Q CY2013: -6.8% YoY) as exports of goods and services (1Q CY2014: +7.9% YoY) outpaced imports (1Q CY201
Slide 44: Retail
Retail o 1Q CY2014 retail sales came in at 4.9%, in line with Retail Group Malaysia (“RGM”)’s estimate of 4.8%. For the 2Q CY2014, retail sales was expected to expand by 7%, higher than the earlier estimate of 5% made by RGM in March. Sporting goods, electrical and electronic goods as well as food d
Slide 45: Retail (Cont'd)
Retail (Cont’d) o Sunway Carnival Shopping Mall’s average occupancy rate dropped to 92.0% in FY2014 from 97.4% in FY2013 mainly attributed to non-renewal by a mini anchor tenant in June 2013 with NLA of 39,676 sq. ft.. The vacancy has been taken up by a new mini anchor tenant commencing July 2014 an
Slide 46: Hotel
Hotel o Both Sunway Resort Hotel & Spa and Pyramid Tower achieved higher average occupancy rate at 78.8% and 82.4% respectively in FY2014 (FY2013: 71.3% and 78.7% respectively). The better performance was driven by improved demand from the corporate and MICE business supported by tactical promotiona
Slide 47: Office
Office o The office market remains challenging as supply continues to outstrip demand. Total existing stock in Kuala Lumpur and Selangor rose 5.68% y-o-y in 1Q CY2014 to 116.52 million sq. ft. due to completion of several office buildings. However, demand remains steady for well located, good qualit
Slide 48: 6. Investor Relations
6. Investor Relations Driving values through sustainable growth 48
Slide 49: Unit Price Performance (IPO to June 2014)
Unit Price Performance (IPO to 30 June 2014) Unit Price Performance of Sunway REIT versus Performance Statistics* Benchmarks (8 July 2010 – 30 June 2014) 90.0% Price (as : RM0.90 TR/GPR/ at 8/7/2010) APREA 80.0% Composite REIT Index Closing Price : RM1.44 70.0% Malaysia (as at 30/6/2014) 69.0% Highe
Slide 50: Unit Price Performance (YTD 4Q2014)
Unit Price Performance (YTD 4Q2014) Unit Price Performance of Sunway REIT versus Performance Statistics* Benchmarks (30 June 2013 – 30 June 2014) 10.0% Price (as : RM1.54 FBM KLCI 6.2% at 30/6/2013) 5.0% Closing Price : RM1.44 (as at 30/6/2014) 0.0% Highest Price : RM1.56 Lowest Price : RM1.22 -5.0%
Slide 51: Unitholders' Composition (as at 30 June 2014)
Unitholders’ Composition (as at 30 June 2014) Individual 9.6% Foreign Sunway 19.3% Berhad 34.6% Domestic 80.7% Institution s 55.8% o Total number of unitholders has reduced from 9,825 (as at 31 March 2014) to 9,581 (as at 30 June 2014). o Retail participation has reduced from 9.8% as at 31 March 201
Slide 52: Comparative Yields for Various Assets
Comparative Yields for Various Assets 8.0% 7.0% 6.84% 2 6.35% 4 6.0% 5.81% 1 5.0% 4.03% 2 4.0% 3.15% 3 3.00% 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 FY2014 DPU of 8.36 sen 2. Information as at 30 June 2014 (Source: Bloombe
Slide 53: Award – The BrandLaureate BestBrands Awards 2013-2014
Award – The BrandLaureate BestBrands Awards 2013-2014 • On 30th May 2014, the Asia Pacific Brands Foundation awarded Sunway REIT The BrandLaureate BestBrands Award 2013 - 2014, Corporate Branding, Best Brands in Investment - REIT. • The award was presented to Sunway REIT for its commitment in delive
Slide 54: Award – MIRA Malaysia Investor Relations 2014 Awards
Award – MIRA Malaysia Investor Relations 2014 Awards • Sunway REIT was nominated in the following four categories: (i) Best CEO (ii) Best CFO (iii) Best Investor Relation website (iv) Quality of Annual Reports/Formal Disclosure • An independent survey undertaken by Thompson Reuters Extel. The respon
Slide 55: Thank You
THANK YOU Driving values through sustainable growth
Sunway Real Estate Investment Trust — Q4 FY2014 Earnings Presentation on 6ix