Pipeline projects and REIT acquisitions to boost long-term growth

Sunway City Kuala Lumpur, 1 July 2024 – Sunway Malls, the mall group operator of seven malls with a combined 5 million square feet of net lettable area (NLA), is forecasting a 6.5% growth in sales performance for 1H2024 year-on-year despite concerns of dampening consumer sentiment, thanks to a robust 1Q2024 growth that came in at 11%. The performance fared ahead of the 1Q2024 national’s GDP of 4.2%.

Better than expected performance from Sunway Carnival, a resilient F&B performance and double-digit growth in jewellery and health & personal care sub-sectors were among the key drivers that shored up the mall’s group overall sales performance.

“Our strategy in focusing on the northern region apart from our traditional stronghold of central region is certainly paying off. The expansion of Carnival in 2023 paved the way for better contribution in terms of sales growth,’’ said HC Chan, CEO of Sunway Malls & Theme Parks.

“In fact, Sunway Carnival topped the sales performance among Sunway Malls during the last Raya festive period. We foresee even more upside with better yield from a refreshed tenant mix once the refurbishment of 500,000 square feet of existing space is completed,” Chan added.

F&B performance also proved to be robust as indicators showed 6% growth y-o-y thus far amidst deescalating food inflation. Jewellery grew 14% growth y-o-y as strong demand for gold pushed sales up. Meanwhile, health & personal care registered the highest growth year-to-date with 25% growth y-o-y.  

Moving ahead, Sunway Malls said it will continue to focus on optimising costs and enhancing its malls through asset enhancement exercises in the near term. The mall group is currently undergoing a RM550 million Asset Enhancement Initiative (AEI) of 800,000 sqft retail space in Sunway Pyramid and Sunway Carnival with a respective investment of RM200mil and RM350mil each. Both exercises to-date have garnered very favourable and good take-up rate with 90% of the retail space leased.

“The outlook for Sunway Malls remains optimistic due to our proven track record, our extensive business partners network and widely recognised brand,” Chan highlighted.

However, Chan flagged continuous challenges posed by dampening of consumer sentiment and consumer spending especially with the roll-back of subsidies and higher cost of living worries. The latest Consumer Sentiment Index in 1Q2024 slipped to 87.1 with concerns on lower employment and expected dipping finances.

For the longer term and broader outlook, Sunway Malls is expected to grow its portfolio of malls through both pipeline developments (with 1.5mil NLA) and acquisitions (with 1.5mil NLA) following Sunway REIT recent acquisition announcements.

In the pipeline, Sunway is also building three malls – Sunway Square with a retail space of 300,000 sqft in Sunway City Kuala Lumpur; Sunway Pier with a retail space of 350,000 sqft in Port Klang; and Sunway Ipoh Mall with a retail space of 1 million sqft in Sunway City Ipoh. Sunway Square is expected to complete in 2025 whereas Sunway Pier and Sunway Ipoh Mall are expected to complete in 2027.

Recent acquisitions announced by Sunway REIT saw the inclusion of six Giant retail complexes and Kiara 163 into its retail portfolio. These assets will also be operated by Sunway Malls in the near future.

The inclusion of both pipeline developments and acquired assets will see Sunway Malls portfolio grow from 7 retail developments to 17.

“In the long run, you can understand why Sunway Malls is so highly optimistic about our growth story – we are building from a position of strength.” Chan remarked.

About Sunway Malls

With 8 retail developments under its belt, Sunway Malls is gearing to be amongst Malaysia’s largest mall owner-operator. The entirety of established malls and pipeline projects currently stand at 7.7 million square feet (sq. ft.) of net lettable area (NLA). The malls are strategically located in key urban markets to serve the surrounding community.

The mall locations are: -

• Sunway Pyramid, Sunway City Kuala Lumpur
• Sunway Velocity, Cheras, Kuala Lumpur
• Sunway Carnival, Seberang Jaya, Penang
• Sunway Putra, Kuala Lumpur
• Sunway Big Box, Sunway City Iskandar Puteri, Johor
• Sunway 163, Mont Kiara, Kuala Lumpur
• Sunway Giza, Sunway Damansara, Selangor
• Sunway Citrine, Sunway City Iskandar Puteri, Johor

Upcoming mall locations are: -

• Sunway Square, Sunway City Kuala Lumpur, Bandar Sunway
• Sunway Pier, Port Klang, Selangor
• Sunway Ipoh Mall, Sunway City Ipoh