MIDF Research keeps ‘neutral’ call on Sunway

PETALING JAYA: MIDF Research is surprised by a high occupancy rate of 90% at the Sunway Velocity Mall in Cheras, Kuala Lumpur, despite oversupply concerns for retail spaces within the area.
Worth noting is that the upcoming MyTOWN Shopping Centre with a net lettable area (NLA) of 1.1 million sq ft is just 1.5km away from Sunway Velocity.
MIDF Research is maintaining a “neutral” call on Sunway with an unchanged target price of RM3.25 due to the overall subdued property market outlook.
The research house has also maintained its earnings forecast for FY16 and FY17 as it had already inputted the earnings contribution from Sunway Velocity mall.
Nonetheless, MIDF Research believes Sunway Velocity Mall should continue enjoying high occupancy rates going forward given the expertise of Sunway in managing shopping malls and good connectivity of Sunway Velocity.
Sunway Velocity Mall, which has a NLA of 880,000 sq ft, managed to secure 90% occupancy rate, with anchor and mini anchor tenants including Parkson, TGV, AEON Max Value, Grand Imperial and Harvey Norman.
The shopping mall is part of the Sunway Velocity project, which spans across 23ha of land in Cheras. It is located 4km away from the KL City Centre with a direct link to two upcoming underground MRT stations.
On other projects in Sunway Velocity, MIDF Research believes that Sunway Velocity Hotel, which is a four-star business hotel, is under construction and due to open by the second half of 2017.
Meanwhile, Sunway Velocity Medical Centre with 240 beds is currently under construction with a targeted opening in the fourth quarter of 2018.