KUCHING: Sunway Real Estate Investment Trust (SunwayREIT) (SunwayREIT) has proposed to acquire 3.3 acres of commercial land in Seberang Jaya, Penang for RM17.2 million with plans to construct the mall’s new wing comprising a nine-storey retail space with 6 levels of parking above the retail space as well as a future commercial tower block.
MIDF Amanah Investment Bank Bhd’s research arm (MIDF Research) enthused that the acquisition is expected to be completed by second half of 2016 subject to approval from Securities Commission.
“We view the land acquisition as long term positive to SunwayREIT. The planned mall expansion would continue the success of Sunway Carnival Shopping Mall and expand the retail exposure of SunwayREIT in Penang mainland,” it said.
Note that Sunway Carnival Shopping Mall is the leading mall in Seberang Jaya and is the third largest net property income (NPI) contributor to SunwayREIT by contributing 7.4 per cent to total NPI in 9MFY16.
Furthermore, the performance of Sunway Carnival Shopping Mall was resilient whereby its 9MFY16 NPI increased 6 per centyoy while rental reversion was encouraging at positive double-digit.
The acquisition price of RM17.2 million is equivalent to market value of the land as appraised by independent valuer.
“We gather that acquisition price of RM120 per square foot (sqft) is close to the transacted prices of RM120-RM184 per sqft for commercial land nearby. The land acquisition cost of RM17.2 million is expected to be funded fully by debt,” it added.
“We maintain our earnings forecasts for FY16/17 as we estimate earnings contribution from the planned new wing of Sunway Carnival Shopping Mall to kick in only from 2021 onwards. Construction of new wing of Sunway Carnival Shopping Mall is expected to take at least three years.”