Sunway Real Estate Investment Trust (Sunway REIT) is acquiring an industrial property in Bukit Tengah Industrial Park in Prai, Penang from Best Corridor Venture Sdn Bhd (BCV) for cash consideration of RM66.8 million.
In a statement today, Sunway REIT Management Sdn Bhd, the manager of Sunway REIT, informed that the latter’s trustee, RHB Trustees Bhd, has entered into a conditional sale and purchase agreement with BCV to acquire the property with gross floor area of 307,487 sq ft.
The property is fully tenanted by three reputable multinational corporations (MNC), namely the anchor tenant, Premium Sound Solutions Sdn Bhd, a Belgian sound products manufacturer, together with a Japanese logistics company and an American information management services company.
It sits on a land spanning 10.4 acres with leasehold tenure expiring on 22 October 2052.
“Sunway REIT intends to extend the leasehold tenure of the land to 60 years after the completion of the proposed acquisition,” it said today (Dec 18).
Strategically located within the Bukit Tengah Industrial Park, the property is immediately adjacent to Juru Auto City, 12-kilometers south-east of Butterworth and 7-kilometers south-west of Bukit Mertajam.
The group said the proposed acquisition is anticipated to generate an initial net property income (NPI) yield of approximately 7.6% based on purchase consideration.
“After taking into consideration the potential leasehold extension premium to be paid, it is envisaged that the property will generate NPI yield of approximately 7%.
“The proposed acquisition is therefore expected to contribute positively to the future earnings and distribution per unit (DPU) of Sunway REIT as well as being yield accretive to the asset portfolio of Sunway REIT.
The group said the proposed acquisition will be fully funded by Sunway REIT’s existing debt facilities and is targeted to be completed in the third quarter of 2024, subject to fulfilment of the condition’s precedent under the SPA.
“Upon completion of the proposed acquisition, Sunway REIT will have asset under management (AUM) of RM8.9 billion, maintaining its position as the second largest listed REIT in Malaysia (measured by AUM).
“Accordingly, the Services, Industrial & Others segments will comprise around 9% of the asset portfolio of Sunway REIT upon completion of the proposed acquisition,” it said.
Sunway REIT Management chief executive officer Clement Chen said the proposed acquisition signifies its continuous efforts in expanding our footprint in the industrial segment.
“This marks Sunway REIT’s second proposed acquisition in 2023 and the third industrial property in its asset portfolio. The proposed acquisition will improve Sunway REIT’s asset portfolio mix while progressing towards our TRANSCEND 2027 target for Services, Industrial & Others segments to comprise between 20% and 30% of property value by 2027,” he said.
Chen added the property is strategically located within Bukit Tengah Industrial Park on mainland Penang and possesses a prominent frontage along the North-South Expressway and Jalan Perusahaan.
“It is wholly-occupied by three established and reputable multinational corporation (MNC) tenants which will provide Sunway REIT with a resilient rental income stream and solid tenant base.”
He concluded: “We believe that the property has positive long-term prospects surrounded by established local and MNC industrial players within the same industrial park.
“This is supported by the strong investment inflows into Penang which is among the top beneficiary states of Malaysia’s approved manufacturing investments in recent years.”
