Analysts: Sunway Velocity Mall sees high occupancy rate amidst oversupply concern
KUCHING: Sunway Bhd’s (Sunway) upcoming shopping mall, Sunway Velocity Mall located in Cheras, Kuala Lumpur has recorded high occupancy rate despite concerns over oversupply of retail space in the Klang Valley.
Following a recent site visit, the research division of MIDF Amanah Investment Bank Bhd (MIDF Research) yesterday said Sunway Velocity Mall’s occupancy rate stood at 90 per cent while having a net lettable area (NLA) of 880,000 square feet.
The anchor and mini anchor tenants of the mall include Parkson, TGV, AEON Max Value, Grand Imperial and Harvey Norman.
“We were pleasantly surprised by this high occupancy rate of the mall given concerns about oversupply of retail spaces in Cheras where an upcoming MyTOWN Shopping Centre with NLA of 1.1 million square feet is located just 1.5 km away from Sunway Velocity Mall,” it said in a report.
“Going forward, Sunway Velocity Mall should continue to enjoy high occupancy rates given the expertise of Sunway in managing shopping malls and good connectivity of Sunway Velocity.”
In the meantime, the research firm added that Sunway Velocity Mall is part of Sunway Velocity project that spanned across 23 acres of land in Cheras.
Sunway Velocity is a vibrant integrated development which comprises of office and retail units, residential projects, Sunway Velocity Hotel and Sunway Velocity Medical Centre.
It is located 4 km away from Kuala Lumpur city centre and is accessibly via direct link to two upcoming underground Mass Rapid Transit (MRT) stations
Sunway Group’s two other developments – Velocity Hotel and Velocity Medical Centre – are currently under construction.
The research firm gathered that Sunway Velocity Hotel, a fourstar business hotel, is targeted for launch by the second half of 2017 (2H17).
Additionally, the research firm said Sunway Velocity Medical Centre, a new hospital with 240 beds is currently under construction and is slated to be launched in the fourth quarter of 2018 (4Q18).
Despite the high occupancy rates, MIDF Research has maintained its neutral rating on Sunway’s Group’s outlook due to the overall subdued property market.
At the same time, the research firm reiterated Sunway’s earnings forecast for FY16-FY17 as it had inputted the earnings contribution from Sunway Velocity mall into its earnings forecast calculation.
Likewise, the research firm has also maintain its fair value for Sunway’s share price at RM3.25 per share, based on sum-of-parts valuation method.