PETALING JAYA: Sunway REIT Management Sdn Bhd, the manager for Sunway REIT, is looking to make some sizeable and meaningful asset acquisitions in the medium term and widen the REIT's presence in the country.
Datuk Jeffrey Ng says one of the acquisitions involved a shopping mall from a third party vendor. However, he expects more competition for good assets, especially with the emergence of more well capitalised REITs in the country.
Chief executive officer Datuk Jeffrey Ng said one of the acquisitions involved a shopping mall from a third party vendor.
Ng said one of the growth plans for Sunway REIT was to expand its asset value to RM7bil in the next five to seven years.
However, he expected more competition for good assets, especially with the emergence of more well capitalised REITs in the country.
“Besides shopping for good assets from third parties, Sunway REIT also has the first right of refusal for Sunway City Bhd's (SunCity) assets which guarantees a ready pipeline of assets for injection into the trust,” he told StarBiz.
Among the new commercial projects underway by SunCity include a number of office towers and office cum retail projects in the Klang Valley.
A new commercial project, Sunway Velocity in Cheras will feature office suites, service apartments, and a shopping mall.
“Sunway REIT will remain as a a retail-focused REIT with an asset portfolio that comprises 60% of retail assets and the balance will be a mix of hospitality, office buildings and other commercial assets,” Ng added.
The trust's eight assets are Sunway Pyramid Shopping Mall, Sunway Carnival Shopping Mall, SunCity Ipoh Hypermarket, Sunway Resort Hotel & Spa, Pyramid Tower Hotel, Sunway Hotel Seberang Jaya, Menara Sunway and Sunway Tower.
Sunway REIT was listed on Bursa Malaysia on July 8 last year.
For the second quarter ended Dec 31, 2010, Sunway REIT recorded gross revenue of RM85.3mil compared with RM72.4mil in the previous quarter. Net property income rose to RM62.8mil from RM55.2mil previously.
The trust would be paying 1.75 sen per unit to its unitholders, a 15.9% increase over the payout in the first quarter.
Total income for distribution amounted to RM46.9mil from realised net profit of RM44.7mil, which is equivalent to a 105% payout ratio.
Ng said the strong second quarter performance was mainly due to a 17.1% increase in the rental renewal rates for the next three years in Sunway Pyramid Shopping Mall.
“The vibrancy of and business synergy within Sunway Integrated Resort City (previously Bandar Sunway) is a key driver to the double-digit rental growth recorded for the retail space at Sunway Pyramid,” he said.
Ng said the rental reversion of Sunway REIT's portfolio of 16% was stronger than other REITs in the country and the improved performance starting this quarter would flow through to unitholders over the coming years.
An analyst with a local brokerage said it was important for Sunway REIT to pursue a consistent asset acquisition strategy to enhance its yield accretive potential.
“It must buy assets that offer potential for higher net lettable area and spruce up the properties to improve the rental rates. Sunway REIT is pretty much a yield play and unitholders mostly invest in the REIT for its dividend yield of 7% to 8% a year,” the analyst added.
By The Star
Source URL: http://threemoonsevolving.blogspot.com/2011/02/sunway-reit-targets-rm7bil-asset-value_02.html
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Datuk Jeffrey Ng says one of the acquisitions involved a shopping mall from a third party vendor. However, he expects more competition for good assets, especially with the emergence of more well capitalised REITs in the country.
Chief executive officer Datuk Jeffrey Ng said one of the acquisitions involved a shopping mall from a third party vendor.
Ng said one of the growth plans for Sunway REIT was to expand its asset value to RM7bil in the next five to seven years.
However, he expected more competition for good assets, especially with the emergence of more well capitalised REITs in the country.
“Besides shopping for good assets from third parties, Sunway REIT also has the first right of refusal for Sunway City Bhd's (SunCity) assets which guarantees a ready pipeline of assets for injection into the trust,” he told StarBiz.
Among the new commercial projects underway by SunCity include a number of office towers and office cum retail projects in the Klang Valley.
A new commercial project, Sunway Velocity in Cheras will feature office suites, service apartments, and a shopping mall.
“Sunway REIT will remain as a a retail-focused REIT with an asset portfolio that comprises 60% of retail assets and the balance will be a mix of hospitality, office buildings and other commercial assets,” Ng added.
The trust's eight assets are Sunway Pyramid Shopping Mall, Sunway Carnival Shopping Mall, SunCity Ipoh Hypermarket, Sunway Resort Hotel & Spa, Pyramid Tower Hotel, Sunway Hotel Seberang Jaya, Menara Sunway and Sunway Tower.
Sunway REIT was listed on Bursa Malaysia on July 8 last year.
For the second quarter ended Dec 31, 2010, Sunway REIT recorded gross revenue of RM85.3mil compared with RM72.4mil in the previous quarter. Net property income rose to RM62.8mil from RM55.2mil previously.
The trust would be paying 1.75 sen per unit to its unitholders, a 15.9% increase over the payout in the first quarter.
Total income for distribution amounted to RM46.9mil from realised net profit of RM44.7mil, which is equivalent to a 105% payout ratio.
Ng said the strong second quarter performance was mainly due to a 17.1% increase in the rental renewal rates for the next three years in Sunway Pyramid Shopping Mall.
“The vibrancy of and business synergy within Sunway Integrated Resort City (previously Bandar Sunway) is a key driver to the double-digit rental growth recorded for the retail space at Sunway Pyramid,” he said.
Ng said the rental reversion of Sunway REIT's portfolio of 16% was stronger than other REITs in the country and the improved performance starting this quarter would flow through to unitholders over the coming years.
An analyst with a local brokerage said it was important for Sunway REIT to pursue a consistent asset acquisition strategy to enhance its yield accretive potential.
“It must buy assets that offer potential for higher net lettable area and spruce up the properties to improve the rental rates. Sunway REIT is pretty much a yield play and unitholders mostly invest in the REIT for its dividend yield of 7% to 8% a year,” the analyst added.
By The Star
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