Malaysia REIT

Sunway REIT achieves IPO forecast payout

Sunway Real Estate Investment Trust (REIT) managed to achieve the initial public offering (IPO) forecast distribution per unit of 6.7 sen per unit on an annualised basis.

Total comprehensive income was RM553.7 million comprising net realised income of RM167.3 million and unrealised income of RM386.4 million mainly arising from fair value gain on portfolio of assets.

“Such achievement was due to the strong performance of the initial portfolio of eight assets which generated net realised income of RM172.1 million ahead of forecast by 3.2 per cent,” said chief executive officer of Sunway REIT Management Sdn Bhd, Datuk Jeffrey Ng, in a statement.

Ng said the Sunway REIT’s portfolio also managed to achieve double digit rental reversion over the next three years, driven mainly by Sunway Pyramid Shopping Mall with rental reversion of 16.3 per cent, with 1.11 million square foot of Net Lettable Area renewed.

Sunway REIT is currently the largest Real Estate Investment Trust in Malaysia. It was listed on the Main Market of Bursa Malaysia Securities Bhd on July 8, 2010.

Sunway REIT has a market capitalisation of RM2.98 billion and its total assets stood at RM4.45 billion as at June 30, 2011.

According to Sunway REIT, institutional investors who purchased the units at the IPO price of 90 sen would have gained a total return of 29.3 per cent of which 6.0 per cent would come from dividend yield and the balance from capital appreciation of the unit price.

Investors of Sunway REIT can expect to receive their fourth quarterly payment of 1.62 sen per unit on Sept 21, 2011, said the company.

The Manager of Sunway REIT also said it will continue its policy of paying out 100 per cent of its distributable income on quarterly basis for financial year 2012.

On prospects ahead, the company expects the market to be volatile in the short term due to global uncertainties but believed the Malaysian Government’s Economic Transformation Plan will help drive domestic consumption.

Sunway REIT closed the session today at RM1.07. — Bernama

Last-minute bid blocks SunREIT from Putra Place

Kuala Lumpur: An eleventh hour court ruling yesterday barred Sunway Real Estate Investment Trust Bhd (SunREIT) from taking possession of the Putra Place located opposite Putra World Trade Centre.

The Court of Appeal yesterday granted a stay of execution on an order made by the High Court on June 28 2011 which declared SunREIT as the true owner of Putra Place. SunREIT was to move into the premises and take possession and control within 72 hours or at noon yesterday.

OSK Trustees Bhd, acting on behalf of SunREIT, had on March 30 2011 bid and won the building that had been put up for auction.

The Putra Place, which houses The Mall, an office complex, and the Legend Hotel, was auctioned off by Commerce International Merchant Bankers Bhd to recover loans given to property owner Metroplex Holdings Sdn Bhd.

Metroplex is claiming that SunREIT is not the registered owner and wants to nullify the public auction.

Following the High Court decision in favour of SunREIT, the previous owner filed a notice of appeal.

SunREIT, as the registered owner, moved into the mall and set up a management office in a vacant lot.

But it could not move into the hotel until it obtained a licence to operate the hotel. Its hotel licence was effective from yesterday.

Yesterday morning, Metroplex went to the Court of Appeal to seek a stay of the execution order granted by the lower court pending its appeal to the Court of Appeal and a July 7th date was fixed for hearing. But shortly after, SunREIT solicitors were told the matter would be heard at 4pm.

Meanwhile, SunREIT was allowed to enforce the order with the assistance of the police in case Metroplex failed to hand over the control and management of the property. Some 30-odd police personnel were at Putra Place yesterday.

At around 11.40am, some 15 Sunway management team were briefed on what the next course of action would be, including the process of entering into the hotel premises.

At around 12.20pm, reporters were informed that Metroplex’s request for a stay would be heard at 4pm. Pending the decision, the management decided not to take possession of the building.

A Sunway Hotel van carrying support staff for the hotel were told to turn back. They returned later in the evening and were identified as operations personnel. This group was briefed and was on standby should there be any hotel employees (under the Legend hotel management) walking out.

The hotel had to run smoothly to avoid disruption to guests staying at the hotel. SunREIT solicitors will try and expedite the hearing of the appeal at the Court of Appeal.

Sunway Real Estate Investment Trust Bhd (SunREIT) expects to almost double the value of The Putra Place following an asset enhancement.

The Putra Place, to be renamed Sunway Putra Place, was bought via auction by OSK Trustee Bhd for RM513.95 million.

Sunway Reit Management Sdn Bhd’s chief executive officer Datuk Jeffrey Ng said the value of the property could be RM1 billion as a result of a capital expenditure of between RM100 million to RM200 million to enhance the property.

“There will be additional retail space. After enhancement, the rental and occupancy rates will be more, in line with the market,” Ng said.

Knight Frank had valued the property at RM576 million.

The Legend Hotel, that will be renamed Sunway Putra Hotel, enjoys an average occupancy of 60 per cent. The Mall, which will carry the name Sunway Putra Mall, has an occupancy rate of 80 per cent.

The office, that will be renamed Sunway Putra Tower is fully occupied.

Founder and chairman of Sunway Group Tan Sri Dr Jeffrey Cheah said it plans to bring back the glory that the property once had by upgrading the place to the standards associated with Bandar Sunway.

It could take anything between six months to a year to plan the upgrade and rebranding of the building.

Cheah was speaking at a briefing yesterday to clarify and explain the status of ownership of the Putra Place.

The Putra Place, which houses The Mall, an office complex, and the Legend Hotel, was auctioned off by Commerce International Merchant Bankers Bhd (CIMB) to recover loans given to property owner Metroplex Holdings Sdn Bhd.

OSK Trustees won the bid at the fourth auction held since April 2008.

Since then, there have been several parties including Metroplex which have initiated legal proceedings to block the sale.

However, on Tuesday, the High Court ruled in favour of SunREIT, stating that it is the true owner of the property and gave Metroplex 72 hours to deliver possession and control of the asset.

This means, that by noon today, SunREIT will move in as the new owner.

Nevertheless, it is understood that Metroplex has filed a notice of appeal.

Meanwhile, Cheah said he does not know the ex-owners of the building and it is merely a commercial deal. He doesn’t have a personal agenda.