Sunway REIT's quarterly NPI sank 43%, declares DPU of 0.77 sen

KUALA LUMPUR (Feb 10): Sunway Real Estate Investment Trust's (REIT) net property income (NPI) fell 43.4% to RM66.01 million for the three months ended Dec 31, 2020, from RM116.62 million in the corresponding three months a year ago, due to lower contributions from its retail and hotel segments that were impacted by the Covid-19 pandemic.

Quarterly revenue sank 38.5% to RM95.77 million from RM155.8 million, its Bursa Malaysia filing today showed. The quarter is classified as "other" as the REIT had recently changed its financial year end to Dec 31, from June 30.

The REIT declared an interim distribution per unit (DPU) of 0.77 sen, which will be paid on March 11.

In the filing yesterday, the REIT said footfall and sales recovery in its retail segment in the quarter under review was hindered by the implementation of the conditional movement control order (CMCO) in Kuala Lumpur and Selangor. This was compounded by the rental support it provided on a case-to-case basis to assist affected tenants, and lower rent turnover and car park income.

Hotels under its asset portfolio, meanwhile, saw lower gross revenue owing to ongoing international travel restrictions, limited domestic travel activities and cautious sentiment, as a result of the increasing Covid-19 daily cases.

For the cumulative six months ended Dec 31, 2020, its NPI fell 43.1% to RM134.1 million from RM235.69 million last year, while revenue dropped 34.7% to RM203.21 million from RM311.15 million.

Meanwhile, the REIT said its outlook for the financial period ending Dec 31, 2021 remains challenging, with uncertainties surrounding the roll-out of vaccine in 1HCY21 and success in containing the transmission of the virus.

Having said that, Sunway REIT said its earnings are cushioned by its diversified asset portfolio, which is further strengthened by the expected new income contribution from its newly-acquired The Pinnacle Sunway. The acquisition was completed last November.

Separately, the REIT manager’s chief executive officer Datuk Jeffrey Ng said the REIT continues to maintain a cautious outlook in the near term, following the spike in Covid-19 cases and reinstatement of MCO on Jan 13, 2021.

“We are currently working even more proactively with our tenants in these trying and uncertain times, to address how best to help them tide through. That being said, we will remain vigilant to balance the wellbeing of our tenants, and at the same time, ensuring our financial capacity and flexibility is in optimum position via our prudent cost containment and capital management measures,” said Ng in a statement today.

Sunway REIT's unit price was unchanged at RM1.41 yesterday, giving the trust a market capitalisation of RM4.83 billion. Over the past year, the counter has fallen 22.5% from RM1.82.

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