A number of analysts upgraded their earnings forecast for the REIT.
PETALING JAYA: Sunway Real Estate Investment Trust
’s (Sunway-REIT) outlook remains positive following the release of better-than-expected third quarter (3Q25) financial results fuelled by strong private consumption and stronger hotel occupancy, analysts say.
A number of analysts upgraded their earnings forecast for the REIT as well as target price, noting the resilient retail segment of its portfolio and the anticipated rise in hotel occupancy for 4Q25 and into the following year due to Visit Malaysia 2026 (VM26).
They also pointed to the more muted than expected impact from the expanded sales and services tax (SST) that came into effect in July.
RHB Research expects the REIT’s retail and hotel segments to grow positively in 4Q25, supported by year-end holidays and festive spending.
“Despite the SST, management guided that the portfolio remains on track to achieve high single-digit rental revisions, underpinned by stable occupancy across key assets,” the research house said.
RHB Research has maintained a “buy” call on the REIT but raised the target price to RM2.45 from RM2.42 after raising its core net profit forecast by 7% for this year, and 6% for both next year and 2027.
MBSB Research has upgraded its call to a “buy” from “neutral” and revised its target price to RM2.34 from RM2.10 after revising earnings estimates by 17.3% for this year, 18.4% for next year, and 17.5% for 2027 to factor in higher contribution from the hotel segment and the positive outlook for the retail segment.
“The REIT’s distribution yield is attractive at 4.9%, which is above average sector distribution yield of 4.5%,” it said.
TA Research, which has upgraded to a “hold” call from “sell”, revised its target price to RM2.35 from RM2.28.
The research house said Sunway-REIT expects the hotel segment to perform well next year, continuing from 4Q25 underpinned by VM26 and tourism-friendly measures in Budget 2026.
Kenanga Research pointed out that the REIT “will fully recognise income from multiple new assets this year, including six new hypermarkets, Sunway 163 Mall, and Sunway Kluang Mall (completed in April, October and December 2024, respectively).
The research house added that portfolio growth prospects continue to be underpinned by a healthy pipeline from Sunway Bhd such as Sunway Velocity Mall and other assets, which it believes would likely begin from 2027 onwards upon the maturity of the assets.
The research house has maintained a “market perform” call and target price of RM2.22 for the REIT.
For 3Q25, Sunway-REIT’s revenue rose 23.1% to RM236.43mil from RM192.14mil in the previous corresponding quarter, driven by improved performance across its retail, hotel and industrial assets while the office and services segments remained stable.
Net profit for the quarter climbed 43.2% to RM127.68mil from RM89.14mil a year earlier, as net property income increased 25.3% to RM180.9mil from RM144.3mil.
