KUALA LUMPUR (May 20): Sunway Real Estate Investment Trust's (REIT) net property income (NPI) slid by 9% to RM103.51 million for the third quarter ended March 31, 2020 (3QFY20) from RM113.77 million a year ago as revenue declined.

Quarterly revenue fell 7.1% to RM140.8 million from RM151.5 million after the Covid-19 pandemic hit its retail and hotel segments, it said in a filing with Bursa Malaysia yesterday.

Lower revenue was, however, partially offset by contribution from the newly acquired Sunway university and college campus, said the REIT.

Net realised income for unitholders in 3QFY20 was down 19.9% to RM60.66 million from RM75.76 million last year.

Moreover, no income distribution was proposed during the quarter as the income distribution frequency of the REIT has been changed from quarterly to semi-annually effective this quarter (3QFY20) to sustain the trust through this challenging period.

In short, distributions for 3QFY20 and 4QFY20 will be declared and paid on a semi-annual basis.

Still, Sunway REIT will have an income distribution of at least 90% of the distributable income in each financial year.

For the nine-month period ended March 31, 2020, Sunway REIT saw its NPI grow 3.3% to RM339.2 million from RM328.51 million in the previous year, while revenue increased 4% to RM451.95 million from RM434.74 million.

The REIT attributed the higher earnings mainly to the newly acquired Sunway university and college campus.

However, net realised income for the nine months slipped 4% to RM206.54 million from RM215.17 million.

As at Dec 31, 2019, Sunway REIT's property value grew to RM8.1 billion from RM7.37 billion a year ago, while its number of properties rose to 17 from 16.

Sunway REIT Management Sdn Bhd chief executive officer Datuk Jeffrey Ng, in a separate statement, said the recent Movement Control Order (MCO), which has created a "new normal" across the country, has impacted the financial situation of many businesses.

"During this difficult period, we have strived to support our tenants to our best endeavour to brave through the storm together and emerge stronger.

"At the same time, we have proactively and pre-emptively introduced cost containment and capital management measures to strengthen our financial position in case of any contingencies, while building on this robust foundation and momentum to be ahead of the recovery curve and to be in the best position to capitalise on any potential growth opportunities which may emerge from this crisis," Ng said.

Ng said Sunway REIT Management has proposed a cash conservation programme as part of its capital management strategy in managing Sunway REIT's cash flow during the conditional MCO period and potential prolongation of post-MCO aftermath.

Noting that opportunities will still prevail in times of adversity, Sunway REIT is reprioritising its Asset Enhancement Initiatives (AEI) while assessing new income-generating strategies such as yield-accretive acquisition, property development, and strategic AEI in anticipation of a post-pandemic recovery in the longer term.

"This is on top of the fact that the current low-interest regime is supportive of strategic fundraising exercises to fund these yield-enriching initiatives," said Ng.

"We have activated a business continuity plan to ensure the well-being of our employees and continuity of the business despite disruption caused by Covid-19," he added.

Sunway REIT's unit price went up one sen or 0.63% to RM1.59 yesterday, valuing the trust at RM4.68 billion. Over the past year, it has fallen some 16% from RM1.90.

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