Sunway REIT’s 3Q NPI up 16.2%, declares 2.37 sen DPU

KUALA LUMPUR (April 28): Sunway Real Estate Investment Trust (Sunway REIT) reported a 16.2% increase in net property income (NPI) to RM96.68 million for the third quarter ended March 31, 2016 (3QFY16), from RM83.18 million a year ago, on strong growth in the retail and hotel segments.

The stronger growth in the two segments was, however, partially offset by lower performance from the office segment, the retail-focused REIT said in a statement yesterday.

NPI for the nine months ended March 31 (9MFY16) was up 10.6% to RM283.68 million from RM256.41 million in the previous corresponding period.

Sunway REIT said 3QFY16 net profit rose 14% to RM64.77 million from RM56.82 million. Revenue increased 17.7% to RM130.34 million from RM110.71 million, as average occupancy at Sunway Putra Hotel improved following the completion of its refurbishment in December 2015.

For 9MFY16, net profit was up 9.4% to RM200.8 million from RM183.54 million in 9MFY15. Revenue rose 13.3% to RM383.43 million from RM338.52 million.

The group proposed a distribution per unit (DPU) of 2.37 sen, an increase of 11.3% compared with 3QFY15, bringing the payout for 9MFY16 to 7.06 sen.

Sunway REIT said retail and hotel segments were its main contributors in 9MFY16, further supported by new income contribution from Sunway Putra Mall following its reopening in May 2015, and Sunway Hotel Georgetown and Wisma Sunway, which were acquired in January 2015 and March 2015 respectively.

Sunway REIT Management Sdn Bhd chief executive officer Datuk Jeffrey Ng said despite the challenging market, the resilient assets located in Sunway Resort City held up the overall performance of Sunway REIT.

“We expect a modest growth in DPU for the financial year ended June 30, 2016, mainly contributed by new and resumption of income contribution from completion of refurbishment and acquisitions, namely Sunway Putra Mall, Sunway Putra Hotel, Sunway Hotel Georgetown and Wisma Sunway.

“Meanwhile, Sunway Resort Hotel & Spa has enjoyed a strong performance in 3QFY16 boosted by the leisure segment, particularly from the Middle Eastern market. The higher DPU was also contributed by a one-off court award amounting to RM6.19 million which was recognised in 2QFY16,” Ng said.

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This article first appeared in The Edge Financial Daily, on April 28, 2016. Subscribe to The Edge Financial Daily here.