Sunway Real Estate Investment Trust · MYX:SUNREIT
Sunway Real Estate Investment Trust — RHB Virtual REIT Forum 2021
19 slides from Sunway Real Estate Investment Trust's conference presentation, Jan 15, 2021
Slide 1: Emerging from COVID-19 and Strategies for Malaysian REITs Going Forward
mrma Malaysian REIT Managers Association Malaysian REIT Managers Association RHB Virtual REIT Forum Emerging from COVID-19 and Strategies for Malaysian REITs Going Forward Friday, 15 January 2021 1
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. Towards a New Normal 2. Retail Segment Adaptations – Across 4 Dimensions a) Experiential vs Transactional Consumption b) Hybridisation of Space c) Turnover Rent Structure and New Business Opportunities d) Digitisation and Omni-Channel Retail 3. REIT Level Strategies 4. Conclusio
Slide 4: 1. Towards a New Normal
1. Towards a New Normal mrma Malaysian REIT Managers Association 4
Slide 5: 1. Towards a New Normal
1. Towards a New Normal 1Q 2020 2Q 2020 3Q 2020 4Q 2020 (F) National Statistics 1st round of MCO / Pre-COVID-19 RMCO reopening 2nd round of CMCO CMCO Daily COVID-19 cases 0 - 2 digits 2 - 3 digits 1 - 3 digits 4 digits GDP (% Y-o-Y) +0.7% -17.1% -2.7% Likely negative GDP (% Q-o-Q) -2.0% -16.5% +18.2
Slide 6: 1. Towards a New Normal (cont.)
1. Towards a New Normal (cont.) Pandemic vs Financial Crisis: Unlike the AFC 1997 and GFC 2008, the economic situation in 2020 is primarily caused by the global viral pandemic and movement restrictions instead of financial drivers When the pandemic is under control, the ‘fear factor’ will be red
Slide 7: 2. Retail Segment Adaptations – Across 4 Dimensions
2. Retail Segment Adaptations – Across 4 Dimensions a. Experiential vs Transactional Consumption b. Hybridisation of Space c. Turnover Rent Structure and New Business Opportunities d. Digitisation and Omni-Channel Retail mrma Malaysian REIT Managers Association 7
Slide 8: 2a. Experiential vs Transactional Consumption
2a. Experiential vs Transactional Consumption Tenants offering essential, personalised and/or experiential, social-based services are less vulnerable to disruption from e-commerce compared to tenants offering non-essential, unbranded and commoditized goods in the new normal. Transactional Consumptio
Slide 9: 2a. Experiential vs Transactional Consumption (cont.)
2a. Experiential vs Transactional Consumption (cont.) Tenant Mix Optimisation and Diversification of Offerings Landlords may review tenancy profiles to create hybrid lifestyle malls with synergised experiential, social and service-based crowd-pulling factors beyond transactional retail Co-labs Cowor
Slide 10: 2b. Hybridisation of Space
2b. Hybridisation of Space Conventional Integrated Developments New Model of Hybridised Space “3-in-3” i.e. “All in Many” “3-in-1” i.e. “All in One” Hybridised Space Office vs Co-Working Hotel Retail Co-Living Mall Usually regional malls in connected Flexible space and size requirements township
Slide 11: 2c. Turnover Rent Structure and New Business Opportunities
2c. Turnover Rent Structure and New Business Opportunities Growing Preference for Turnover Rent Structure (Revenue Sharing with minimal base rent) among tenants to mitigate business risk in the new normal Challenge for Landlords: Leakages may arise from the growing yet unaccounted online sales despi
Slide 12: 2c. Turnover Rent Structure and New Business Opportunities (cont.)
2c. Turnover Rent Structure and New Business Opportunities (cont.) Potential New Trend with Turnover Rent Structure: Provision of New Downstream Logistics Services by Mall Landlords to Tenants i.e. Warehousing, Aggregation & Delivery Support Ecosystem In-store purchases can be delivered to doorstep
Slide 13: 2c. Turnover Rent Structure and New Business Opportunities (cont.)
2c. Turnover Rent Structure and New Business Opportunities (cont.) Potential New Business Opportunities for Mall Landlords: Cloud Kitchens New trend in the Sharing Economy – also known as ‘commissary kitchens’, ‘smart kitchens’ and ‘virtual kitchens’ F&B Tenants: Decreased upfront and operationa
Slide 14: 2d. Digitisation and Omni-Channel Retail
2d. Digitisation and Omni-Channel Retail Front-End Traffic Catchment: ‘Bricks-and-Clicks’ / ‘Clicks-and-Mortar’ Model Capture digital traffic (collection + delivery) while maintaining physical storefront for walk-ins and complementary experiential, social and service-based offerings which cannot b
Slide 15: 2d. Digitisation and Omni-Channel Retail (cont.)
2d. Digitisation and Omni-Channel Retail (cont.) Back-End: Big Data Analytics Integrated multi-platform real-time data collection & analysis Automated processes with enhanced efficiency and optimised costs Informed decisions ahead of the curve in fast-moving market Constant feedback and impr
Slide 16: 3. REIT Level Strategies
3. REIT Level Strategies mrma Malaysian REIT Managers Association 16
Slide 17: 3. REIT Level Strategies
3. REIT Level Strategies The current pandemic situation presents opportunities for REIT: 1. Strategic acquisitions and M&A with motivated vendors and potential turnaround opportunities. 2. Diversification in less cyclical, defensive and sunrise segment assets e.g. healthcare, education, industrial,
Slide 18: 4. Conclusion
4. Conclusion Current Situation in 2020: Primarily caused by pandemic and movement restrictions Moving Forward in 2021 (with prudent management of COVID-19): ‘Fear Factor’ will be reduced Rebound in domestic retail and travel spending International trade / travel restrictions will be gradually
Slide 19: Thank You
mrma Malaysian REIT Managers Association Thank You 19
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