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Saturday, January 29, 2011

Sunway REIT to beat profit forecast

SUNWAY Real Estate Investment Trust (REIT), Malaysia's biggest property trust, expects to do better than the RM170 million net profit it forecast for the year.

This is due to strong rental revision of 16 per cent for its entire portfolio in 2010, which has improved performance of the properties, Datuk Jeffrey Ng, the chief executive officer of Sunway REIT Management Sdn Bhd said.

Sunway REIT has eight assets worth RM3.7 billion. They are Sunway Pyramid Shopping Mall, Sunway Carnival Shopping Mall, SunCity Ipoh Hypermarket, Sunway Resort Hotel and Spa, Pyramid Tower Hotel, Sunway Hotel Seberang Jaya and two office tower.

Ng said the main driver for growth this year will be Sunway Pyramid.
Net rental for Sunway Pyramid was raised from RM8.90 per sq ft (psf) to RM9.40 psf after Sunway REIT's initial public offering last July, by Sunway City Bhd (SunCity).

The mall has recorded a sales growth rate of 15 per cent, higher than industry growth of between five and 10 per cent.

Any major change to the mall's earnings will have a positive impact on the trust's overall performance as it contributes 60 per cent to the trust's earnings.

Ng expects Sunway REIT to also surpass its forecast revenue of RM330 million, led by overall improvement of Sunway Integrated Resort City (SIRC).

SIRC, a multi-billion development by Suncity has two operating hotels, shopping malls and universities, Sunway Medical Centre, condominiums and villas, convention centres, shopoffices and a theme park.

Ng said SIRC will benefit from the rising growth in tourism spending, which is around RM50 billion a year.

"If SIRC continues to grow and be vibrant, there is no reason why Sunway REIT cannot achieve double digit growth year on year," Ng said.

By Business Times

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