Stronger retail, office segments lift Sunway REIT NPI

KUALA LUMPUR (May 4): Sunway Real Estate Investment Trust (Sunway REIT) reported a 4% rise in net property income (NPI) to RM100.18 million in its third quarter from RM96.69 million a year ago, which it attributed to a resilient retail segment as its office segment improved.

The REIT declared 2.37 sen of distribution per unit (DPU) for the quarter ended March 31, 2017 (3QFY17), comparable with the same period a year ago, payable on June 6. This brings its DPU for the first three quarters of FY17 (9MFY17) to 6.92 sen per unit, from 7.06 in 9MFY16.

Quarterly revenue rose 3.2% to RM134.57 million from RM130.35 million.

For 9MFY17, NPI grew 2.3% to RM290.3 million from RM283.68 million in 9MFY16, while revenue climbed 1.8% to RM390.33 million from RM383.43 million.

It said the retail segment’s NPI grew 8.2% year-on-year (y-o-y) in 9MFY17, mainly on normalised contribution from Sunway Putra Mall, which had granted a 2.5-month rent-free period to tenants during the initial opening of the mall last year. Sunway Pyramid Shopping mall and Sunway Carnival Shopping mall’s performance also grew moderately during the quarter.

The office segment, meanwhile, recorded a 16.4% y-o-y growth in NPI due to higher occupancy rate at Sunway Putra Tower.

The two segments’ performance mitigated a slowdown in the hotel segment, where NPI slid 21.9%, due to the closure of Sunway Pyramid Hotel for refurbishment since April 2016.

Sunway REIT Management Sdn Bhd chief executive officer Datuk Jeffrey Ng said the REIT’s retail assets remain resilient despite the growing global trend of online shopping, as the REIT’s retail asset manager enhanced lifestyle and experiential shopping at its malls.

“The resiliency is also supported by lower online shopping penetration rate in Malaysia,” he added.

This article first appeared in The Edge Financial Daily, on May 4, 2017.

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