Sunway REIT to keep income distribution ratio

PETALING JAYA: Despite the challenging outlook, Sunway Real Estate Investment Trust (REIT) would maintain its income distribution payout of at least 90% for the financial year ending June 30, 2021 (FY21).

The manager of the REIT, Sunway REIT Management Sdn Bhd, said it remained cautious on the outlook for FY21 due to the uncertainties surrounding global economic recovery.

The manager said it would continue to focus on rebuilding the business segments which have been adversely impacted by the pandemic while strengthening its balance sheet and expanding income stream via yield-accretive acquisition and prudent capital management.

In addition, the manager plans to capitalise on the window of opportunity to undertake phased refurbishment of Sunway Resort Hotel in FY21.

“We believe the refurbishment is timely as Sunway REIT has sufficient capacity, supported by rooms inventory at Sunway Pyramid Hotel and Sunway Clio Hotel to support the recovering demand of domestic travellers while cross-border restriction persists,” it said in a statement.

Sunway REIT yesterday announced a final income distribution of 2.38 sen per unit, which brings the total income distribution for FY20 to 7.33 sen per unit, representing at least 90% of the distributable income to unitholders for the year in review.

Sunway REIT’S net property income fell 30.2% to Rm77.6mil for the fourth quarter ended June 30, 2020, from Rm111.2mil in the corresponding quarter last year.

For the full year, its net property income was 5.2% lower at Rm416.8mil, compared with Rm439.7mil in FY19.

During the quarter in review, Sunway REIT slid into a net loss of Rm13.5mil from a net profit of Rm178mil, while revenue fell 27.9% to Rm104.9mil from Rm145.6mil previously.

For the full year, Sunway REIT posted a net profit of Rm208.2mil, down 46.1% from Rm386.4mil in the preceding year, while revenue fell 4% to Rm556.9mil from

Rm580.3mil previously.

Overall, Sunway REIT’S performance was dragged by lower income from the retail and hotel segments amid the restrictions and loss of business during the various phases of the nationwide movement control order to contain the spread of the Covid-19 virus.

However, Sunway REIT continued to see growth in the office and services segments during the year.

Sunway REIT’S manager said while it appeared that the majority of the nations had troughed in second quarter 2020, the economic recovery path might be patchy due to uncertainties associated with prolonged precautionary household and business expenditures as well as cautious employment markets.

“Global growth is projected to rebound to 5.4% in 2021, alongside the strengthening of consumption and investment activities. Risk to recovery remains elevated with vulnerability to resurgence of the pandemic, which may eventually necessitates the reactivation of containment measures,” it said.