PETALING JAYA: Sunway Real Estate Investment Trust (SunREIT) is cautiously optimistic about its outlook 2023, underpinned by a stable gross domestic product growth projection of between 4% to 5%.

The investment manager said its prospects are further supported by the expectation of sustained growth momentum of the retail segment of its business, further recovery in the hotel division, full year income contribution from the new wing of Sunway Carnival Mall in Penang and from Sunway Resort Hotel upon full completion of its refurbishment.

SunREIT reported its results for the second financial quarter ended June 30 (2QFY23), which saw net profit drop marginally lower year-on-year (y-o-y) by 3.1% to RM72.2mil, despite revenue having grown by 15.2% y-o-y to RM166.5mil.

Basic earnings per share stood at 1.96 sen versus 2.03 sen previously.

Its net earnings for the six months ended June 30 slid 6.7% y-o-y to RM168.6mil compared to the first half of 2022, while turnover actually increased by 17% to RM349.3mil.

SunREIT has proposed a dividend per share of 4.62 sen for 2QFY23.

In a separate statement, SunREIT said it had entered into a conditional sale and purchase agreement with Kwasa Properties Sdn Bhd, a wholly-owned subsidiary of the Employees Provident Fund, to acquire a portfolio of six freehold hypermarkets in Klang Valley and Johor for RM520mil.

“SunREIT’s property value will increase to RM9.69 billion upon completion of the proposed acquisition, from RM9.10bil as at Dec 31, 2022.

“The properties are income-generating and are envisaged to contribute positively to the future earnings and distribution per unit of SunREIT as well as being yield accretive to the asset portfolio of SunREIT.”

The company added that the properties are expected to generate an NPI yield of approximately 8% based on the purchase consideration, in comparison to SunREIT’s portfolio NPI yield of 5.4% for the financial year ended Dec 31, 2022.