SC grants waiver to Sunway REIT for Penang land buy

KUALA LUMPUR (July 14): The Securities Commission Malaysia (SC) has granted a waiver to Sunway Real Estate Investment Trust (Sunway REIT) that will allow the company to acquire land to construct an extension of the Sunway Carnival Mall in Seberang Perai, Penang.

Sunway REIT said the SC, in a letter yesterday, approved its application for the exemption of Paragraph 8.44(b) and (c) of the REIT Guidelines, which provides that a fund is not permitted to conduct property development activities and the acquisition of a vacant land.

“The approval granted by the SC for the exemption is subject to the condition that Sunway REIT continues to hold the expanded Sunway Carnival for at least two years from the date of completion of the construction of the extension to the existing mall,” it said in a filing with Bursa Malaysia.

On June 20, Sunway REIT announced the proposed acquisition of a tract of land, measuring 143,225 sq ft (13,306 sq m), that is adjacent to Sunway Carnival from its parent Sunway Bhd for RM17.2 million cash.

The acquisition is to facilitate its plans to expand Sunway Carnival’s net lettable area. The extension will comprise a nine-storey shopping mall that also includes a six-storey parking bay above the retail space, with a one-floor basement parking.

Sunway REIT expects the mall extension to enhance its earnings in the future, and thus create value for its unitholders.

Its shares ended the day up four sen or 2.3% at RM1.74 yesterday, with a market capitalisation of RM5.12 billion.

Want to know the price trends of a development? Click here.

This article first appeared in The Edge Financial Daily, on July 14, 2016. Subscribe to The Edge Financial Daily here.