PETALING JAYA: Sunway Real Estate Investment Trust (Sunway REIT) saw a 42.8% decline in net property income (NPI) to RM68.1 million for its first quarter ended Sept 30, from RM119.1 million previously, largely attributable to lower contribution from the retail and hotel segments.
The property manager’s financial year-end has been changed from June 30 to Dec 31, thus the current financial period of Sunway REIT will be an 18-month period from July 1 2020 to Dec 31, 2021.
Revenue declined 30.8% to RM107.44 million, from RM155.35 million.
It had previously announced an advance interim income distribution of 0.9 sen per unit for the period from July 1 to Sept 30, 2020, which was paid on Nov 10.
In the first quarter of the 2021 financial year (Q1’21), retail malls in Sunway REIT’s asset portfolio showed encouraging recovery in footfalls and tenants’ sales to between 70% and 80% of pre-Covid-19 levels during the recovery movement control order (RMCO) period.
The retail segment registered a lower revenue of RM77.7 million in Q1’21 compared with RM105.5 million in Q1’20, largely due to ongoing a rental support programme which was provided on a case-to-case basis in supporting affected tenants during the RMCO.
The hotel segment recorded a lower revenue of RM2.8 million in Q1’21 compared with RM23.7 million in Q1’20), predominantly due to the closure of Sunway Resort Hotel for phased refurbishment and loss of business arising from inbound travel restrictions, group and corporate events.
Revenue for the office segment increased by 3.4% year on year, supported by steady average occupancy rates across all office properties in Sunway REIT’s asset portfolio.
The services segment recorded a year-on-year increase of 2.8% in revenue and NPI to RM14.9 million. Meanwhile, the industrial & others segment contributed RM1.5 million to revenue and NPI.
Looking ahead, CEO Datuk Jeffrey Ng said the company’s operating segments are on track for a gradual recovery in the later part of the financial period when the pandemic stabilises, with Sunway REIT’s earnings partially cushioned by its diversified asset portfolio and new income contribution from recently acquired The Pinnacle Sunway.
“Despite the prevailing tough operating environment, we are undeterred as we continue to pursue our mid-term aspiration as outlined in the TRANSCEND 2025 strategic objectives. We see opportunities of assets disposal by vendors with stretched balance sheet, demand for assets within the emerging sub-sectors as well as mergers and acquisitions opportunities,” he said.
