Sunway REIT stays cautious in tough environment

Sunway Petaling Jaya property

PETALING JAYA (July 14): Sunway REIT Management Sdn Bhd is adopting a cautious approach for its future acquisitions because of stiffer competition in the office, retail and hospitality property segments, reports The Edge Malaysia in its current issue.

Sunway REIT Management Sdn Bhd CEO Datuk Jeffrey Ng Tiong Lip said the company anticipates a softer property market ahead, and has adopted a more cautious and prudent strategy for third-party acquisitions since last year.

The company is now focusing on unlocking value in newly injected assets such as Sunway Putra Mall, which located in Jalan Putra, Kuala Lumpur.

Sunway Putra Mall is a refurbishment project by Sunway REIT, comprising Sunway Putra Hotel, Sunway Putra Tower (offices) and a retail mall. iT will be fully completed by year-end. The office tower is now 61% occupied.

Ng said the three-in-one, integrated development (hotel, tower and mall) is a strong value proposition and will attract the right tenants and guests. 

“Our competitive edge lies in our pricing strategy in view of the prevailing low rental base,” he added. 

Challenging oversupply situation

The oversupply of office space in the Kuala Lumpur area has put rental yield growth under pressure, prompting asset owners to quickly secure long-term leases with prospective tenants.

“In this challenging oversupply situation, tenants have much bargaining power. We are in talks with several prospects, including a potential anchor tenant for the office tower. While we wish to diversify our tenant base, which has a high component of public-sector tenancies, into a more private-sector base, our priority is ultimately to fill the vacancies,” said Ng.

Meanwhile, the company aims to grow its total assets to RM7 billion by 2017 from RM5.8 billion presently.

“Through diversification, we have managed to create a portfolio that offers both growth and stability for the investor. At the same time, we are considering possible opportunities in education assets, data [centres], logistic warehouses or industrial properties.”

The company’s asset portfolio includes the retail, hospitality, office and medical subsectors.

Looking for properties to buy or rent? With >150,000 exclusive listings, including undervalued properties, from vetted Pro Agents, you can now easily find the right property on Malaysia's leading property portal EdgeProp! You can also get free past transacted data and use our proprietary Edge Reference Price tool, to make an informed purchase.
  1. Pavilion REIT’s outlook seen challenging due to spike in new Covid-19 cases
  2. KIP REIT 1Q NPI up 3.7% on lower property operating expenses
  3. Malls to consider new roles to support e-commerce