Expect dip in payout for FY17: SunREIT

PETALING JAYA: Sunway Real Estate Investment Trust (SunREIT) shareholders can expect a marginal decrease in distribution per unit for FY17 due to lower contribution from the hotel segment and cessation of manager’s fee payable in units effective FY17.
However, it is committed to distributing 100% of its distributable net income for FY17, according to the filing with the stock exchange.
SunREIT Management Sdn Bhd, the manager of SunREIT, has proposed a distribution per unit (DPU) of 2.28 sen for the second quarter ended Dec 31, 2016, bringing total DPU for the first half to 4.55 sen against 4.69 sen a year ago.
On an annualised basis, this translated into a distribution yield of 5.3% based on the market closing price of RM1.72 as at Dec 31, 2016.
SunREIT saw its second-quarter net profit drop marginally by 0.5% to RM71.14 million compared with RM71.52 million in the previous corresponding period. Revenue was down 3.8% from RM131.87 million to RM126.88 million.
For the first half of the year, SunREIT’s net profit also dipped 0.5% from RM136.03 million to RM135.29 million. Revenue came in at RM255.76 million, 1.1% higher than the RM253.08 million it made a year ago. Its net property income increased by 1.7% to RM190.1 million.
SunREIT Management CEO Datuk Jeffrey Ng said the business environment in FY17 remains tough and the company will continue to balance future growth in distribution income through active asset enhancement initiatives (AEIs) and acquisitions.
The manager expects a modest growth for SunREIT’s retail assets contributed by the resilient performance from the flagship asset, Sunway Pyramid Shopping Mall and Sunway Carnival Shopping Mall as well as expected gradual improvement in the performance of Sunway Putra Mall.
However, the hotel segment will see less contribution due to competitive market environment, weak corporate and leisure market as well as the closure of Sunway Pyramid Hotel, which was closed since April 2016 to undertake an accelerated refurbishment.
Meanwhile, it is expected that SunREIT’s office segment to gradually improve in FY17 following the gradual improvement in
Sunway Putra Tower.