KUALA LUMPUR (Nov 10): Sunway Real Estate Investment Trust (KL:SUNREIT) reported a 4% year-on-year decline in net property income (NPI) to RM173.8 million for the third quarter ended Sept 30, 2026 (3QFY2026), from RM180.9 million a year earlier, mainly due to higher operating costs and lower revenue.

Revenue edged down 1.7% to RM232.3 million from RM236.4 million, primarily due to the disposal of its Sunway University and College campus as part of its asset recycling strategy, according to the trust's filing with Bursa Malaysia on Tuesday (Nov 10). Other property operating expenses rose 5.8% to RM52.8 million from RM49.9 million.

Distributable income fell to RM116.1 million, or 3.39 sen per unit, from RM143.6 million, or 4.19 sen per unit. No distribution was declared for the quarter under review.

The REIT's retail segment recorded a 5.6% year-on-year increase in revenue to RM176.6 million from RM167.2 million, driven by the full reopening of Sunway Carnival Mall's existing wing in May 2025, stronger contributions from Sunway Pyramid Mall and higher rental income from Sunway Putra Mall. Consequently, segment NPI rose 5.3% to RM128.3 million from RM121.9 million.

Its hotel segment, however, saw revenue drop 13.7% to RM30.2 million from RM35 million a year earlier, as average occupancy dipped to 74% from 76% across its hotel assets, except Sunway Putra Hotel. Segment NPI declined 14.5% to RM29 million from RM33.9 million.

For the cumulative nine months ended Sept 30, 2026 (9MFY2026), NPI rose 1.7% to RM501.2 million from RM493 million in 9MFY2025, as revenue grew 1.3% to RM675.7 million from RM666.7 million. Distributable income fell to RM331.7 million, or 9.68 sen per unit, from RM338.7 million, or 9.89 sen.

In a statement, Sunway REIT Management Sdn Bhd CEO Derek Teh Wan Wei said the trust remains cautiously optimistic about its prospects for the remainder of 2026, with its retail segment expected to sustain growth on resilient consumer spending, healthy occupancy and positive rental reversions.

Its office and industrial segments are also expected to benefit from continued leasing momentum and improving occupancy, while the trust will focus on strengthening hotel performance through marketing, pricing strategies and stronger demand for banqueting and meetings, incentives, conferences and exhibitions (MICE) activities.

"We will continue to prioritise proactive asset management, operational efficiency and sustainable growth to enhance portfolio resilience and deliver long-term value to our unitholders," he said.

Sunway REIT units closed two sen or 1% lower at RM2.03 on Tuesday, giving the trust a market capitalisation of RM6.95 billion.