Sunway REIT to grow total assets to over RM7b

KUALA LUMPUR: Sunway REIT Management Sdn Bhd, the manager of Sunway Real Estate Investment Trust (REIT), is targeting to grow its total assets to more than RM7 billion in the next three to four years.

CEO Datuk Jeffrey Ng told reporters after Sunway REIT’s AGM yesterday that its assets are worth between RM2 billion and RM3 billion.

The assets consist of completed buildings, namely Sunway Giza, Sunway University and Monash University, while the ongoing developments are Pinnacle, Sunway Pyramid 3 and Sunway Velocity.

Sunway REIT’s proposal for an issuance of new units of up to 10% of its total approved fund size of 3.7 billion units was approved by unitholders at the AGM. The mandate will be valid for 12 months.

According to Ng, the mandate will allow Sunway REIT to raise funds for future acquisitions and capital expenditure (capex).

“This is to enhance the value of Sunway REIT and to refinance existing debt as well as for working capital purposes,” he said.

Ng says Sunway REIT’s assets are worth up to RM3 billion.

“This is a strategy to pre-empt any future fundraising we may need for possible future acquisitions.”

There have been no acquisitions yet for the 2013 calendar year.

“There is still one quarter left in the year. Sunway REIT will remain selective of its investment criteria and will make sure there is long-term sustainable growth and that it is yield accretive.

“We are not in a hurry to do deals for the sake of doing them. As long as our balance sheet is strong and our gearing level remains at a comfortable level, we are in a position to close deals quickly if we need to,” Ng said.

As at June 30 this year, Sunway REIT had total assets of RM5.18 billion. The company’s capex guidance for the next two to three years is RM530 million.

Ng said the 2014 financial year will be exciting for REIT, in particular for Sunway Pyramid Shopping Mall.

“The mall is due for a major rental reversion in September. We are confident of achieving a rental reversion of between 16% and 18%, supported by Sunway Bhd’s new investments in infrastructure enhancements surrounding Sunway Resort City.

“The mall is also undergoing expansion involving the creation of an additional net leaseable area of about 20,362 sq ft and the reconfiguration of the existing space,” he said.


This article first appeared in The Edge Financial Daily, on September 26, 2013.