KUALA LUMPUR (Aug 3): Sunway Real Estate Investment Trust's (REIT) net property income (NPI) fell 30.2% to RM77.61 million for the fourth quarter ended June 30, 2020 (4QFY20) from RM111.18 million a year ago, as revenue declined following the various stages of Movement Control Order (MCO) that were implemented by the Malaysian government to curb the Covid-19 pandemic. The group also provided rental support to tenants and hotel lessees during the period.

Quarterly revenue fell 27.9% to RM104.93 million from RM145.56 million previously, Sunway REIT said in a bourse filing.

The REIT's 4QFY20 performance, however, was partially cushioned by the diversified income stream from the remaining sectors within its asset portfolio, which were relatively unaffected by the MCO, as a majority of these properties were on master leases, it added.

Net realised income for unitholders in 4QFY20 was down 67.4% to RM21.91 million from RM67.16 million last year.

Sunway REIT proposed a final distribution per unit (DPU) of 2.38 sen for the six-month period ended June 30, 2020 (2HFY20), bringing total DPU to 7.33 sen for full FY20. Based on the unit price of RM1.62 as at June 30, 2020, this translated into a distribution yield of 4.5%.

For full FY20, Sunway REIT's NPI declined 5.2% to RM416.81 million from RM439.7 million in the previous year, while revenue slipped 4% to RM556.88 million from RM580.23 million. Net realised income for the 12-month period fell 19.1% to RM228.45 million from RM282.34 million.

The REIT said it saw improved performance across all segments for 1HFY20, before the retail and hotel segments were impacted by the Covid-19 pandemic and MCO in 2HFY20.

Sunway REIT owned a portfolio of 17 assets comprising four retail malls, six hotels, four offices, a medical centre, an industrial property and an education asset with a combined property value of RM8 billion as at June 30, 2020.

The REIT recently proposed to acquire The Pinnacle Sunway for RM450 million and to raise up to RM710 million via a private placement to fund the acquisition as well as the expansion of Sunway Carnival Mall.

On completion of the proposed acquisition, Sunway REIT's property value will increase to RM8.5 billion, reinforcing its position as the second largest listed REIT in Malaysia, it said.

Sunway REIT Management Sdn Bhd chief executive officer Datuk Jeffrey Ng, in a separate statement, said the group is seeing encouraging recovery in footfall at its malls since the Recovery Movement Control Order was enforced in June.

"The business units management teams have also recently launched 'Ke Sana Ke Sini Ke Sunway' campaign, a leisure package which was fully sold within two weeks of launch. Due to the overwhelming response, a sequel of the campaign was launched, 'Ke Sana Ke Sini Ke Sunway Lagi'. These campaigns, which aim to capture the short-term surge in demand amongst consumers following a period of lockdowns, demonstrated the strength of business synergies within the Sunway City ecosystem."

Meanwhile, as part of the REIT's cash conservation initiative, Ng said the group is in the process of establishing a Distribution Reinvestment Scheme to provide the additional flexibility to unitholders to receive future income distribution in cash, units or a combination of both.

On future prospects, he said Sunway REIT maintains a cautious outlook for FY21 due to the uncertainties surrounding global economic recovery. "[We] will focus on rebuilding the business segments that have been adversely impacted by the pandemic while strengthening its balance sheet and expanding the income stream via yield-accretive acquisitions and prudent capital management strategies," he added.

Sunway REIT's unit price settled four sen or 2.6% lower at RM1.50 today, giving the trust a market capitalisation of RM4.42 billion. Year to date, the REIT's unit price has declined nearly 18% or 32 sen.