TA Research said that due to evolving market conditions, the REIT is adopting a more flexible approach.
PETALING JAYA: In a recalibration of its Transcend 2027 strategy, Sunway Real Estate Investment Trust
(Sun-REIT) is intensifying its focus on retail, the sector where it has historically excelled, while scaling back on other asset classes.
TA Research said after a recent discussion with Sun-REIT’s management, it was revealed that the REIT is making a pivotal shift in this roadmap.
Initially, the REIT aimed to allocate 20% to 30% of the portfolio to services and industrial assets, with 10% to 20% to foreign properties, the research house said.
However, TA Research said, due to evolving market conditions, particularly the compressed yields in the industrial sector, the REIT is adopting a more flexible approach.
“This adjustment enables Sun-REIT to focus on yield-accretive retail opportunities while staying open to acquisitions in other sectors without rigid targets. We believe this more adaptable strategy strengthens the REIT’s agility, empowering it to leverage its core competencies for sustained long-term growth.
“By focusing on high-performing retail assets, Sun-REIT is better positioned to compete and build a resilient portfolio in the challenging market landscape.
“As part of this strategic recalibration, Sun-REIT is concentrating on developing a diversified retail portfolio that would bolster income resilience by financial year 2027 (FY27).
“The portfolio is segmented into four categories: super-regional malls, regional malls, neighbourhood malls, and big-box retail.
“Super-regional malls, such as Sunway Pyramid, attract a mix of local and international visitors, while regional malls like Sunway Carnival serve growing areas like Penang. Neighbourhood malls and big-box retail cater to the daily needs of nearby residential communities.
“This approach, according to the research house, allows Sun-REIT to tap into a broader consumer base, ensuring a more balanced and resilient income stream.
“By targeting underserved markets and expanding geographically across Malaysia, the REIT reduces regional risks while reinforcing its competitive edge through expert management and curated experiences,” TA Research added.
The research house maintained its “buy” call on Sun-REIT with an unchanged target price of RM1.98.
