KUALA LUMPUR (April 27): Sunway Real Estate Investment Trust (REIT) reported a 16.2% increase in net property income (NPI) to RM96.69 million for the third quarter ended March 31 (3QFY16) from RM83.18 million a year ago, on strong growth in the retail and hotel segments.

In a statement today, Sunway REIT said that the stronger growth in the two segments was, however, partially offset by lower performance from the office segment.

Sunway REIT said revenue for 3QFY16 rose 17.7% to RM130.35 million from RM110.71 million, as average occupancy at Sunway Putra Hotel improved following the completion of its refurbishment in December 2015.

Net profit, meanwhile, increased 14% to RM64.77 million from RM56.82 million.

NPI for the nine months ended March 31 (9MFY16) rose 10.6% to RM283.68 million from RM256.41 million in the previous corresponding period.

For 9MFY16, revenue rose 13.3% to RM383.43 million from RM338.52 million. Net profit was up 9.4% to RM200.8 million from RM183.54 million in 9MFY15.

The group proposed a distribution per unit (DPU) of 2.37 sen, an increase of 11.3% compared to 3QFY15, bringing the payout for 9MFY16 to 7.06 sen. The payment date falls on May 31.

Sunway REIT said the retail and hotel segments were its main contributors 9MFY16, further supported by new income contribution from Sunway Putra Mall following its re-opening in May 2015, Sunway Hotel Georgetown and Wisma Sunway, which were acquired in January 2015 and March 2015 respectively.

Sunway REIT Management Sdn Bhd chief executive officer Datuk Jeffrey Ng said that despite the challenging market, the resilient assets located in Sunway Resort City has held up the overall performance of Sunway REIT.

"We expect a modest growth in DPU for the financial year ended June 30, 2016 (FY16) mainly contributed by new and resumption of income contribution from completion of refurbishment and acquisitions, namely Sunway Putra Mall, Sunway Putra Hotel, Sunway Hotel Georgetown and Wisma Sunway.

"Meanwhile, Sunway Resort Hotel & Spa has enjoyed a strong performance in 3QFY16 boosted by leisure segment particularly from the Middle Eastern market. The higher DPU was also contributed by one-off court award amounting to RM6.19 million which was recognised in 2QFY16," he said.

Ng added that Sunway Pyramid Hotel East is temporarily closed effective this month for 10-month refurbishment and will be re-opened in the first quarter of 2017.

"The refurbishment will increase the hotel's room inventory to 564 rooms from the current 549 and elevate the hotel from a superior to a deluxe category 4-star international-class hotel.

"These include 22 new family rooms and suites categories, designed to accommodate a growing increase in family and leisure travellers to the destination," said Ng.

He added that the group's RM1 billion investment in the 3-in-1 mixed use Sunway Putra is gaining traction albeit gradually in this challenging market environment.

"Following the refurbishment and transformation exercise, the asset/hotel manager of Sunway Putra have embarked on a rebranding and re-positioning exercise as well as aggressively promoted the properties.

"We have seen encouraging increase in footfall to Sunway Putra Mall as well as improvement in occupancy at Sunway Putra Hotel and we believe that Sunway Putra will contribute significantly to Sunway REIT over the longer term when it stabilizes after the initial gestation period," said Ng.

Sunway REIT closed unchanged today at RM1.60 for a market capitalisation of RM4.71 billion.