Sunway REIT proposes to acquire 3.3 acres of commercial land in Seberang Jaya, Penang to expand Sunway Carnival Shopping Mall

Sunway REIT proposes to acquire 3.3 acres of commercial land in Seberang Jaya, Penang to expand Sunway Carnival Shopping Mall

Subang Jaya, 20 June– Sunway REIT Management Sdn. Bhd., the Manager of Sunway Real Estate Investment Trust (“Sunway REIT”), is pleased to announce that RHB Trustees Berhad, as trustee of Sunway REIT (“Trustee”), has entered into a conditional sale and purchase agreement (“SPA”) with Commercial Parade Sdn. Bhd., an indirect wholly-owned subsidiary of Sunway Berhad, to acquire a parcel of land adjacent to Sunway Carnival Shopping Mall for a total purchase consideration of RM17.2 million.  The land has been independently valued by Messrs C H Williams Talhar and Wong.

Description of the land is as follows:

Property description

:

A parcel of vacant commercial land currently being used as car park

Title details

:

PN 1814, Lot 5493, Mukim 1, District of Seberang Perai Tengah

Tenure

:

Leasehold – 99 years (expiring on 21 October 2092)

Land area

:

13,306  sq.m.

Registered owner

:

Commercial Parade Sdn. Bhd.

Purchase price

(RM million)

:

17.2

Independent valuation dated 6 June 2016

(RM million)

:

17.2

The land is strategically located in the heart of Seberang Jaya in the mainland of Penang, a 56 acres integrated township initiated by the Government to boost the administrative, residential, industrial and commercial sectors of Malaysia’s northern region. The location is conveniently accessible from the Penang Bridge and Penang International Airport.

Sunway REIT’s total asset value (“TAV”) will increase by 0.27% to RM6.447 billion based on the audited TAV as at 30 June 2015 upon the completion of the proposed land acquisition. The proposed acquisition will be funded by its existing debt financing and is expected to be completed by the second half of 2016 (“2HCY2016”) subject to the conditions precedent in the SPA which include the Securities Commission’s waiver to Clause 8.44(b) and Clause 8.44(c) of the Guidelines on Real Estate Investment Trusts (“REIT Guidelines”) which restricts a fund from carrying out property development and acquisition of a vacant land.

In line with Sunway REIT’s investment strategy, the proposed land acquisition offers Sunway REIT an opportunity to expand its retail portfolio within a thriving township in Malaysia. The proposed acquisition is planned for the extension of the new wing of Sunway Carnival Shopping Mall (“New Wing”) comprising a nine-storey retail space with  6 levels of parking above the retail space and another level of parking in the basement as well as a future commercial tower block. The extension of the new wing is currently under planning.

Dato’ Jeffrey Ng, CEO of Sunway REIT Management Sdn. Bhd., said, “Sunway Carnival Shopping Mall is a market leader in the thriving township of Seberang Jaya, Penang. The success of the mall evidenced by the continuous growth in the footfall since the launch of the mall in 2007 supported by healthy rental growth has benefitted the population and contributed positively to the economic activity of the township. We are confident that the new wing will serve a larger catchment and  further boost the vibrancy of the township.” 

He added, “In an ever-evolving retail market landscape, we constantly keep abreast of market trends to stay ahead of the game. The proposed expansion of Sunway Carnival Shopping Mall enables us to enrich our tenancy mix by offering retail space to welcome new and more international and regional brands which will improve the retail landscape in the mainland of Penang. In addition, the proposed acquisition is in line with our strategic positioning to remain as a retail focused REIT in Malaysia and to deliver sustainable growth to unit-holders.”

The proposed acquisition is not expected to have any material effect on the earnings of Sunway REIT for the financial year ending 30 June 2016. Barring any unforeseen circumstances, the proposed expansion of Sunway Carnival Shopping Mall is expected to contribute positively to the performance of the mall and hence, the earnings of Sunway REIT in the long-term.

About Sunway Real Estate Investment Trust                                                                                                      

Sunway Real Estate Investment Trust (“Sunway REIT” or “Trust”) is one of the largest retail-focused1 real estate investment trusts (“REITs”) in Malaysia with a diverse portfolio strategically located across award winning integrated townships in key locations in Greater Kuala Lumpur, Penang, and Perak.

Sunway REIT was listed on the Main Market of Bursa Malaysia Securities Berhad (“Bursa Malaysia”) on 8 July 2010. The market capitalisation of Sunway REIT stood at RM4.8 billion as at 31 May 2016. Sunway REIT is a component of FTSE-Bursa Malaysia Mid 70 Index, FTSE4Good Bursa Malaysia Index (with effect 20 June 2016) and Thomson Reuters / Global Property Research / APREA Composite REIT Index Malaysia. Sunway REIT owns a portfolio of 14 assets comprising 4 retail malls, 5 hotels, 4 offices and a medical centre. Property value stood at RM6.38 billion as at 31 March 2016.

Sunway REIT’s assets are primarily located in Sunway Resort City (“SRC”) where its flagship asset, Sunway Pyramid Shopping Mall, is located. The other assets located in SRC include Sunway Resort Hotel & Spa, Sunway Pyramid Hotel East (formerly known as Pyramid Tower East), Menara Sunway and Sunway Medical Centre. On the northern Peninsular of Malaysia, Sunway REIT owns SunCity Ipoh Hypermarket in Perak. On the mainland of Penang, Sunway REIT owns Sunway Hotel Seberang Jaya and Sunway Carnival Shopping Mall. In FY2015, Sunway REIT added two assets into the portfolio, namely Wisma Sunway in Shah Alam, Selangor and Sunway Hotel Georgetown, marking its maiden foray into Penang Island.

Sunway REIT owns four properties in in Kuala Lumpur, namely Sunway Tower and the remaining three assets which constitute part of the 3-in-1 integrated development, Sunway Putra (formerly known as Sunway Putra Place). Sunway Putra consists of Sunway Putra Mall, Sunway Putra Hotel and Sunway Putra Tower.

1 Retail-focused is defined as at least 60% contribution from the retail assets to property value, revenue or NPI.

 

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