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Thursday, September 26, 2013

Sunway REIT can raise up to RM1b more to fund capex and acquisition needs


PETALING JAYA (Sept 26, 2013): Sunway Real Estate Investment Trust (Sunway REIT), at its current gearing level of 31%, has room to raise another RM800 million to RM1 billion to fund its capital expenditure plans and future acquisitions.

Sunway REIT Management Sdn Bhd CEO Datuk Jeffrey Ng said it already has some RM1.4 billion ready to fund its future requirements through a RM1.6 billion commercial paper programme. Some RM315 million has already been utilised as at financial year-end.

"This will inevitably increase the proportion of floating rate borrowings going forward. We will convert the floating rate borrowing into fixed rate via interest rate swaps or other medium term note programmes when the opportunities arise through close monitoring of interest rate swaps movements," he added.

Ng also said that it is on track to achieve its over RM7 billion property value target in two to four years time, helped by assets from its sponsor, Sunway City Bhd, valued in excess of RM2 billion.

"Notwithstanding this portfolio of sizeable pipeline assets, we will continue to leverage on our investment strategy and balance sheet to very selective search for quality assets from third parties," he told reporters after its AGM here yesterday.

Ng said it will continue to adopt a complementary strategy by balancing pipeline assets with third party assets to build its position as one of the country's largest REIT with a retail focus.

As of June 30 this year, Sunway REIT has total assets under its management valued at RM5.18 billion.

"We do not want to rush just for the sake of buying. We are not in a hurry to do a deal. If the pricing is right and lucrative for us, then we will look into it.

"I would like to highlight that we remain selective in our assets. We only buy assets that give long term and sustainable growth for us," he added.

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