Sunway REIT Management Sdn Bhd (SRSB), the manager of Sunway Real Estate Investment Trust (Sunway REIT), has entered into a conditional sale and purchase agreement for the acquisition of The Pinnacle Sunway for RM450 million. The property has been independently valued by Knight Frank Malaysia Sdn Bhd at the purchase price.
The Pinnacle Sunway is a 24-storey Grade A, GBI-certified and MSC-status office building with three-storey mezzanine floors and six levels of basement car park. It is strategically located within the master-planned integrated township development of Sunway City with excellent connectivity to various major transportation links and good access to major roads and expressways. The Pinnacle Sunway has managed to achieve an average occupancy rate of over 98% over the past 3 years from 2017 to 2019. The Pinnacle Sunway is presently 100% occupied (based on committed and/or commenced tenancies) and has a diverse tenant mix as at the Material Date of Valuation. These tenants include tenants that are in technology and telecommunication sectors, and pharmaceutical sector, which collectively make up 65% of NLA.
The acquisition will place Sunway REIT’s property value to increase by 5.6 per cent from RM8.0 billion as at 30 June 2019 to RM8.5 billion upon the completion of the exercise, and further reinforcing its position as the second largest listed REIT in Malaysia. The acquisition allows Sunway REIT to enhance the scale to maximise the business synergies between The Pinnacle Sunway and its existing properties within the Sunway City eco-system.
This acquisition is expected to be yield accretive to Sunway REIT’s assets portfolio based on a net property income (NPI) yield of 6.2 per cent (based on 2019 NPI) and is expected to contribute positively to the future earnings and distribution per unit of Sunway REIT upon completion.
The acquisition will be funded by debt and equity where the latter is to be raised from a private placement exercise.
Postal address : The Pinnacle Sunway, Persiaran Lagoon, Bandar Sunway, 47500 Subang Jaya, Selangor Darul Ehsan.
Strata title : Not applicable
Master title : Lot 61759, Town of Sunway, District of Petaling, State of Selangor Darul Ehsan
Category of land use : Building
Express condition : Commercial building
Tenure : Leasehold interest for 99 years, expiring on 1st April 2097, remaining unexpired term of 77 years
Market value : RM450 million (RM944 psf NLA) as appraised by the Knight Frank Malaysia as at the material date of valuation of 1 June 2020.
Age of building : Approximately 6.5 years from its original issuance date of certificate of completion and compliance dated 31 December 2013
Land Area: 1.8 acres
Gross floor area : 700,802 square feet (Total 1,145,554 square feet including 444,752 square feet for 855 car parking bays)
Net lettable area : 576,864 square feet
Percentage of occupancy: 100%
Vendor: Sunway Integrated Properties Sdn Bhd
Purchaser: Sunway Real Estate Investment Trust (Sunway REIT)
Note: Gross Rental Income for the FYE2019 is RM36.4mil