Sunway City Kuala Lumpur, 22 August 2022 – Sunway REIT Management Sdn. Bhd., the Manager of Sunway Real Estate Investment Trust (Sunway REIT), has released its financial results for the quarter ended 30 June 2022.

Second quarter unaudited financial results for the period from 1 April 2022 to 30 June 2022 (2Q 2022) 

(The corresponding quarter last year (4Q FP2021), from 1 April 2021 to 30 June 2021, is used for comparison purposes.)

Sunway REIT reported a set of strong financial performance for the quarter ended 30 June 2022. Revenue rose 39.8% year-on-year (y-o-y) to RM144.5 million in 2Q 2022, underpinned by strong performance from the Retail segment. Net property income (NPI) surged 71.4% y-o-y to RM106.9 million in 2Q 2022, from RM62.3 million in the same quarter of the preceding year. 

For the quarter under review, revenue for the Retail segment soared 73.0% y-o-y to RM101.4 million, boosted by improved performance across retail properties, particularly our flagship Sunway Pyramid Mall. Retail footfall and tenants’ retail sales in the quarter under review were boosted by festive spending in conjunction with Hari Raya celebration and relaxation of COVID-19 safety measures as the nation transitioning into the endemic phase. NPI increased at a higher quantum, from RM25.5 million in 4Q FP2021 to RM71.6 million in 2Q 2022, representing an increase of 180.5% y-o-y, largely due to the increase in revenue and the recovery of doubtful debts as a result of continued improvement in rental collection in the current quarter. 

The Hotel segment recorded improvements in average occupancy rates for the quarter under review pursuant to the nation transitioning into the endemic phase. Despite the improvement in operational performance, the Hotel segment reported revenue of RM6.0 million in 2Q 2022, lower by 31.1% y-o-y compared to RM8.7 million in 4Q FP2021, primarily due to recognition of minimum guaranteed rent for Sunway Putra Hotel in the corresponding quarter of the preceding year which has since ceased. NPI for the Hotel segment eased correspondingly to RM5.1 million in 2Q 2022, from RM7.0 million in 4Q FP2021. Sunway Resort (formerly known as Sunway Resort Hotel) has progressively unveiled its transformed brand-new guest rooms since May 2022. 

Revenue for the Office segment increased 2.4% y-o-y to RM19.7 million in 2Q 2022 compared to RM19.3 million in the corresponding quarter of the preceding year, contributed by higher revenue from all office properties except for Sunway Tower. NPI dipped 1.5% y-o-y, from RM12.9 million in 4Q FP2021 to RM12.7 million in 2Q 2022, due to increase in property operating expenses. 

Revenue and NPI for the Services segment grew 2.8% y-o-y to RM15.8 million in 2Q 2022, attributed to annual rental reversions for Sunway Medical Centre (Tower A & B) and Sunway university & college campus. 

The Industrial & Others segment posted revenue of RM1.7 million in 2Q 2022, from RM1.5 million in the same quarter last year, representing an increase of 10.0% y-o-y. The improvement in revenue and NPI was attributed to rental reversion for Sunway REIT Industrial – Shah Alam 1. 

First half unaudited financial results for the period from 1 January 2022 to 30 June 2022 (1H 2022)

(The corresponding period last year (1H 2021), from 1 January 2021 to 30 June 2021, is used for comparison purposes.)

Sunway REIT registered revenue of RM298.5 million and NPI of RM225.8 million in 1H 2022, compared to revenue of RM207.7 million and NPI of RM129.4 million in the corresponding period of the preceding year. Revenue and NPI surged 43.7% y-o-y and 74.6% y-o-y respectively, boosted by better performance from all segments. 

For 1H 2022, the Retail segment posted a 78.0% y-o-y surge in revenue to RM199.8 million. NPI jumped 186.8% y-o-y to RM141.9 million in 1H 2022, boosted by substantially lower rental support, higher turnover rent, promotion and car park income amid improved retail footfall and tenants’ retail sales. 

Revenue for the Hotel segment increased 6.2% y-o-y to RM24.5 million in 1H 2022, from RM23.1 million in the same period last year. NPI improved in tandem to RM22.5 million in the period under review, representing an increase of 13.5% y-o-y. The improvement was largely contributed by the higher guaranteed income for Sunway Clio Property and Sunway Hotel Georgetown in 1Q 2022.

Revenue for the Office segment inched up 1.6% y-o-y to RM39.2 million in 1H 2022, from RM38.6 million in the same period last year, supported by stable occupancy rate. NPI was marginally higher by 0.4% y-o-y to RM26.4 million. 

The Services segment’s revenue and NPI rose 3.0% y-o-y to RM31.6 million on the back of annual rental reversions for Sunway Medical Centre (Tower A & B) and Sunway university & college campus. 

The Industrial & Others segment posted an increase of 10.0% y-o-y in revenue and NPI to RM3.4 million for 1H 2022 for the same reason mentioned above. 

Sunway REIT proposed an interim distribution per unit (DPU) of 4.22 sen for the period from 1 January 2022 to 30 June 2022, representing an increase of 158.9% compared to the same period of the preceding year. The higher DPU was contributed by the strong improvement in financial performance of Sunway REIT in 1H 2022 and higher distribution payout of 95%, from 92.5% in the corresponding period of the preceding year. 

Dato’ Jeffrey Ng, Chief Executive Officer of the Manager, commented, “We are pleased to report a set of strong financial performance in the current quarter. The Retail segment continues to demonstrate strong growth during the quarter and it is encouraging that tenants’ retail sales have surpassed the pre-pandemic level in 2019. In line with the improved financial performance and cash flows, we are confident that Sunway REIT is able to maintain a distribution payout of 95% in 2022.”

He added, “Sunway REIT maintains an optimistic outlook for 2H 2022, supported by strong growth in the Retail segment, gradual recovery in the Hotel segment, new income contribution from the new wing of Sunway Carnival Mall and resumption of income contribution from phased re-opening of our transformed flagship Sunway Resort, which is well positioned to capitalise on the anticipated gradual return of foreign tourists. All these upsides in revenue contributions are expected to cushion off the anticipated rise in interest rate.”

He concluded, “On the acquisition front, we are pleased that it is gaining momentum pursuant to the acquisition of Sunway Pier and proposed acquisition of Sunway REIT Industrial - Petaling Jaya 1. Our strong balance sheet places Sunway REIT in a favourable position to capitalise on acquisition opportunities to grow our assets portfolio, in line with our Transcend 2027 strategic roadmap.” 

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