Sunway REIT 4Q net property income falls 7%, declares 4.68 sen DPU

• The contraction in Sunway REIT’s NPI was attributed to higher reversal of doubtful debt provision recorded in 4QFY2022 and the impact of increased Imbalance Cost Pass-Through (ICPT) electricity charges across all segments.

KUALA LUMPUR (Jan 30): Sunway Real Estate Investment Trust's (Sunway REIT) net property income (NPI) decreased by 7.2% to RM135.7 million for the fourth quarter ended Dec 31, 2023 (4QFY2023) from RM146.2 million in the previous year’s corresponding quarter.

The contraction in Sunway REIT’s NPI was attributed to higher reversal of doubtful debt provision recorded in 4QFY2022 and the impact of increased Imbalance Cost Pass-Through (ICPT) electricity charges across all segments.

Revenue for the quarter, meanwhile, inched up 2% to RM190.5 million from RM186.7 million, primarily driven by the retail and hotel segments, buoyed by strong retail footfall and healthy retail sales, as well as higher tourist arrivals during festive seasons and school holidays.

Sunway REIT declared a final income distribution of 4.68 sen per unit — to be paid on Feb 29 — bringing its total distribution per unit for the financial year ended Dec 31, 2023 (FY2023) to 9.3 sen.

This translates to a distribution yield of 6%, based on Sunway REIT’s unit price of RM1.54 as of Dec 31, according to the REIT’s statement.

For the full FY2023, Sunway REIT’s NPI expanded 5% to RM526.9 million from RM500.2 million in FY2022, as revenue rose 10% to RM715.7 million from RM651.4 million, propelled by robust performance from the retail and hotel segments, coupled with resilient performance across office, services, industrial and others segments.

Looking ahead, Sunway REIT anticipates a further increase in tourist arrivals given the expected improvements in inbound flight connectivity and visa entry liberalisation for visitors from China, India and the Middle East, which should have a positive impact on the REIT’s retail and hotel segments.

“Nonetheless, gains may be moderated by the rising cost of business and some operation disruptions from the ongoing asset enhancement initiatives (AEIs) in two of our major malls,” says Clement Chen, CEO of Sunway REIT Management Sdn Bhd, the REIT manager.

“Overall though, we look to sustain our stable performance in FY2024 with the successful completion of the ongoing AEIs driving NPI growth moving forward,” he added.

Shares of Sunway REIT closed two sen or 1.27% higher at RM1.59 on Tuesday, valuing the group at RM5.45 billion.

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