NET PROPERTY INCOME FOR SUNWAY REIT INCREASED BY 10.1%

Press Release by Sunway REIT – Nine Months of Financial Year Ending June 2018 
FINANCIAL RESULTS ANNOUNCEMENT
NET PROPERTY INCOME FOR SUNWAY REIT INCREASED BY 10.1% FOR THE 
NINE MONTHS OF FINANCIAL YEAR ENDING JUNE 2018
 
Key Highlights:
o    Healthy revenue growth of 8.7% year-on-year to RM424.2 million for the 9M FY2018,
supported by growth across all segments and new income contributions from completed
acquisitions during the financial year.
o    Proposed DPU of 2.37 sen for the third quarter of FY2018, bringing 9M FY2018 DPU
to 7.42 sen and annualised distribution yield of 6.2%.
o    The acquisition of Sunway Clio Property was completed in February 2018.
o    Proactive capital management to mitigate refinancing risk and optimise debt profile.
o    Expansion of Sunway Carnival Shopping Mall has commenced in March 2018.
 
Financial Highlights

¹ Based on actual DPU of RM9.19 sen declared in FY2017 and unit price of RM1.78 as at 30 June 2017.
N.A.  denotes not applicable
 
Bandar Sunway, 3 May 2018 – Sunway REIT Management Sdn. Bhd., the Manager of Sunway
Real Estate Investment Trust (Sunway REIT), is pleased to announce its financial results for the period
ended 31 March 2018.
 
Nine months unaudited financial results for the period from 1 July 2017 to 
31 March 2018 (9M FY2018)
 
Sunway REIT has delivered a set of encouraging financial results for the nine months of financial
year ending June 2018. The Trust has reported a healthy revenue growth of 8.7% year-on-year (y-o-y)
to RM424.2 million for the 9M FY2018, supported by growth across all segments and new
income contributions from completed acquisitions during the financial period (Sunway REIT has
completed the acquisition of Sunway REIT Industrial-Shah Alam 1 and Sunway Clio Property
in August 2017 and February 2018 respectively).  Correspondingly, net property income (NPI)
increased by 10.1% y-o-y to RM319.7 million.
 
The retail segment performed commendably for the 9M FY2018, mainly attributable to growth
from all malls, except Suncity Ipoh Hypermarket on the back of lower rental rate upon renewal
of the tenancy in 4Q FY2017. Revenue for the retail segment expanded by 3.6% y-o-y for
9M FY2018 to RM315.3 million. NPI improved by 3.7% y-o-y to RM226.3 million, in line with
the growth in revenue. The higher revenue and NPI was largely contributed by higher average
gross rent achieved by Sunway Pyramid Shopping Mall and Sunway Carnival Shopping Mall.
Sunway Putra Mall has incurred lower rental rebates which contributed to higher revenue.
 
The financial performance of the hotel segment rebounded for the nine months of FY2018,
mainly contributed by higher revenue from all hotels except Sunway Hotel Seberang Jaya.
This was further boosted by resumption of income contribution from Sunway Pyramid Hotel
following the full completion of its refurbishment in June 2017 and commencement of income
contribution from Sunway Clio Property upon the completion of the acquisition in February 2018.
For the 9M FY2018, revenue for the hotel segment surged by 37.8% y-o-y to RM63.9 million
and NPI jumped 39.4% y-o-y to RM60.7 million.
 
The office segment reported a modest growth on the back of higher occupancy rates at
Menara Sunway and Sunway Putra Tower, however, it was partially offset by marginally lower
average occupancy rate at Wisma Sunway. During the financial period under review, revenue
improved by 4.0% y-o-y to RM24.4 million. However, NPI eased by 1.5% y-o-y to RM12.1 million
due to higher property operating expenses.
 
Under the “Others” segment, revenue and NPI rose by 26.3% y-o-y due to new income
contribution from Sunway REIT Industrial – Shah Alam 1 upon the completion of the acquisition
of the property in August 2017. This segment forms the defensive and steady income stream
strategy of the assets portfolio.
 
Third quarter unaudited financial results for the period from 1 January 2018 to 
31 March 2018 (3Q FY2018)
 
Sunway REIT has registered a moderate growth in revenue and NPI for the third quarter
ended 31 March 2018. Revenue and NPI grew by 5.2% y-o-y and 5.1% y-o-y respectively,
driven by improved financial performance across all segments as discussed above.
 
The retail segment recorded a revenue and NPI growth of 2.2% y-o-y and 1.5% y-o-y
respectively, predominantly contributed by stronger financial performance from
Sunway Pyramid Shopping Mall.
 
During the quarter, the financial performance for the hotel segment was mixed. Revenue
and NPI surged 18.1% y-o-y and 17.2% y-o-y respectively, largely due to resumption of
income contribution from Sunway Pyramid Hotel upon the completion of its refurbishment.
However, this is partially offset by lower revenue from Sunway Resort Hotel and Spa
due to softer leisure demand.
 
As the occupancy rates for the office properties improved, the office segment registered
a revenue growth of 3.9% y-o-y, primarily attributable to Sunway Putra Tower. NPI eased
by 2.1% y-o-y due to higher property operating expenses.
 
Under the “Others” segment, revenue and NPI rose by 28.6% y-o-y in 3Q FY2018 due to
new income contribution from Sunway REIT Industrial – Shah Alam 1 as mentioned above.
 
For the quarter ended 31 March 2018, the Manager proposed distribution per unit (DPU)
of 2.37 sen, unchanged compared to the corresponding quarter in the preceding year.
Cumulative DPU for 9M FY2018 increased by 7.2% y-o-y to 7.42 sen, translating into
an annualised distribution yield of 6.2% based on unit price of RM1.60 as at 31 March 2018.
 
Dato’ Jeffrey Ng, CEO of Sunway REIT Management Sdn. Bhd., commented,
“I am pleased to share that the financial earnings remained intact with continued growth
from the retail segment and gradual improvement in the office segment, albeit the office
segment is a small contributor to the asset portfolio. The resiliency of the income growth
is supported by a diversified base in the asset portfolio coupled with new income contribution
from the completed acquisitions in this financial year.”
 
He added, “In a rising interest rate environment, we proactively manage our debt profile
in order to optimise the average cost of debt and stagger the debt maturity profile. We do
not foresee any refinancing risk in view of the strong performance of our underlying assets
and healthy macro-economic condition of the country.”
 
On 4 March 2018, the ground-breaking ceremony for the expansion of Sunway Carnival
Shopping Mall at Seberang Jaya, Penang was held with onward commencement of
construction works. The expansion is expected to add 330,000 sq.ft of net lettable area
(NLA) for the new wing of the mall. Upon the completion in 2020, the expanded mall
(existing wing and new wing) will offer a total NLA of approximately 850,000 sq.ft.

Important notice

Kindly read this media release in conjunction with the announcement released to Bursa Malaysia dated
3 May 2018 for a more comprehensive understanding of Sunway REIT’s financial results.

— end of press release —
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