Sunway REIT finally made its debut on Bursa Malaysia today, taking its position as the largest REIT on the local bourse. At its closing price of 88.5 sen, it’s market cap stands at RM2.37 billion, eclipsing YTL’s Starhill REIT which held the top position previously. Here are the properties (and respective valuations) that have gone into SUNREIT:
Retail Properties
Sunway Pyramid Shopping Mall RM2.3 billion
Sunway Carnival Shopping Mall – RM250 million
SunCity Ipoh Hypermarket – RM50 million
Hospitality
Sunway Resort Hotel & Spa – RM480 million
Pyramid Tower Hotel – RM270 million
Sunway Hotel Seberang Jaya – RM56 million
Office Properties
Menara Sunway – RM138 million
Sunway Tower – RM185 million
SUNREIT is forecast to generate a Net Profit of RM170.3 million for the year ending 30-Jun-2011 or around 6.4 sen per unit. It is planning to distribute 6.7 sen per unit which is a yield of 6.9% on the Retail Subscription Price of RM0.90.
Looking at its Proforma Balance Sheet, the REIT will have borrowings of around RM989 million against total property valuation of RM3.73 billion. Net Borrowings works out to be around 36% of Net Assets.
I think I will only consider buying some units if the price drops to 80 sen or less. Usually property valuations in REITs are around 15-20% overvalued and while I haven’t looked at Sunway REIT offering in detail, I suspect it is probably overvalued. Sure the property quality is great but let’s wait for a great price before going in!
Tags: bursa malaysia reits, sunreit, sunway reit