Sunway REIT outlines 3 strategies to overcome Covid-19 impact

PETALING JAYA: Sunway Real Estate Investment Trust (Sunway REIT) is embarking on three main strategies of liquidity management via cash conservation, managing profit & loss via cost containment and strengthening the balance sheet via capital management to survive, recover and grow amid this challenging Covid-19 period and beyond.

CEO Datuk Jeffrey Ng said it has implemented prudent cash conservation measures to ensure sufficient flexibility in managing its cash flow to comfortably meet ongoing obligations and commitments, which includes the variation of income distribution frequency from a quarterly to a semi-annual basis.

“We have also proposed a distribution reinvestment scheme to provide additional flexibility to unitholders to receive future income distribution in cash, units or a combination of cash and units,“ he said in a letter to unitholders in conjunction with Sunway REIT’s 10th anniversary.

He added that various cost containment measures have been implemented, including the reduction, cancellation and/or deferment of non-essential operational and capital spending.

“Where possible, procurement contracts have been renegotiated to achieve better terms and outcomes, further lowering our existing outflows for the best interests of the REIT and our unitholders. We will also continue to work closely with our lessees, operators and property managers to achieve operational cost savings, leaner cost structure as well as enhanced business efficiency and synergies.

“Given the current accommodative interest rate environment, we have also been proactive in refinancing some of our existing borrowings at competitive rates to maximise returns to our unitholders,“ said Ng.

He noted that the recently announced third quarter FY2020 financial results may not reflect the full extent of the Covid-19 crisis and believes that the prospects in the near term would remain challenging.

“We aim to work closely with our asset managers, tenants and various other stakeholders to quickly and decisively reinforce our market position and chart a stronger future in the post-Covid-19 world.”

Ng said it has provided rental support to assist affected tenants and lessees and invested in marketing support initiatives and implemented Covid-19 standard operating procedures to ‘pull’ back footfall into malls and ‘push’ traffic into stores.

In spite of the headwinds and challenges in the current year, the group remains determined to achieve the goals and aspirations outlined in the next five years under its Transcend 2025 strategic direction, including becoming the leading diversified REIT in Malaysia, growing its property value to RM13-15 billion and to boost services and industrial & others sectors from 15% to 25% of TAV.

“We are determined to reinforce our position as one of the top three listed M-REITs in the country by market capitalisation and property value. We will be continuing our proactive but prudent approach in applying strict evaluation criteria on each and every prospective acquisition to ensure sustainable yield accretion for unitholders. We will also continue to take steps to conscientiously defend our existing portfolio to ensure their long term fundamentals,“ said Ng.

source https://www.thesundaily.my/business/sunway-reit-outlines-3-strategies-to-overcome-covid-19-impact-CX2743127