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Sunway REIT to acquire hotel, office building for RM134m

KUALA LUMPUR: Sunway Real Estate Investment Trust (Sunway REIT) plans to acquire Sunway Hotel Georgetown and Wisma Sunway office building for a combined RM134 million from subsidiaries of Sunway Bhd.

In a filing with Bursa Malaysia yesterday, Sunway REIT will be paying RM74 million for Sunway Hotel Georgetown, Penang — a 4-star, 250-room hotel located in Penang.

Thereafter, Sunway REIT will sign a master lease agreement with Sunway City Sdn Bhd (SBH), to leaseback the property to SBH for 10 years.

Meanwhile, Wisma Sunway, a 19-storey office building in Shah Alam, Selangor, will be purchased for RM60 million from Sunway Mas Sdn Bhd and Daksina Harta Sdn Bhd — subsidiaries of Sunway Holdings Sdn Bhd.

In a statement yesterday, Sunway REIT Management Sdn Bhd chief executive officer Datuk Jeffrey Ng said the acquisition of Sunway Hotel Georgetown and Wisma Sunway will increase the total asset size of Sunway REIT by 2.4% to RM5.69 billion.

The acquisitions of Sunway Hotel Georgetown and Wisma Sunway are expected to be completed in the third quarter of financial year 2015 ending June 30, 2015 (3QFY15), and the first quarter of financial year 2016 ending June 30, 2016 (1QFY16) respectively.

The acquisitions will be funded through Sunway REIT’s existing debt facility, and will increase its gearing ratio from 32% as at Sept 30, 2014, to 33.5%.

 

This article first appeared in The Edge Financial Daily, on December 9, 2014

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