Sunway-REIT's net property income for the retail division had more than doubled in the financial year 2022 due to lower rental support to tenants and contribution from Sunway Carnival’s new wing, said MIDF Research.
PETALING JAYA: Sunway Real Estate Investment Trust
’s (Sunway-REIT) outlook remains solid as the economic and borders reopening may aide in its rental reversion and earnings potential.
Notably, its net property income (NPI) for the retail division had more than doubled in the financial year 2022 (FY22) due to lower rental support to tenants and contribution from Sunway Carnival’s new wing, said MIDF Research.
“Similarly, the NPI of the hotel division was higher by some 80% year-on-year (y-o-y) due to the reopening of Sunway Resort Hotel and improved hotel room occupancy following the reopening while contributions from office and other segments remained stable,” it said.
UOB Kay Hian Research (UOBKH) was a bit more cautious despite the good results, noting it had flattish earnings growth forecasts for the group as there could be pressures, moving forward, by a rising operating expenditure and finance costs.
“We opine the current share price has priced in the recovery and potentially fewer-than-expected overnight policy rate hikes.
“This is given that its yield spread to 10-year Malaysian Government Securities has narrowed close to mean as its share price has appreciated 9% in the year-to-date period,” UOBKH Research said.
It had downgraded Sunway-REIT to a “hold” with an unchanged target price of RM1.61.
“Our projected 2023 earnings growth of 1% y-o-y has also taken into account rising operating expenditures and finance costs,” it said.
