PETALING JAYA, May 14 — Sunway Real Estate Investment Trust (Sunway REIT), one of Malaysia’s largest diversified real estate investment trusts (REITs), reported a strong financial performance for the first quarter ended March 31, 2026 (1Q2026).
The company recorded a 10% year-on-year increase in profit before tax, rising to RM114.8 million compared to the same period last year. The improvement was mainly supported by stronger contributions from its retail segment and lower finance costs.
Revenue for the quarter increased by 2% to RM223.0 million, while net property income (NPI) rose by 5% to RM164.4 million. In addition, basic earnings per unit improved to 3.18 sen from 2.88 sen previously. However, Sunway REIT did not declare a distribution per unit (DPU) for the quarter because the trust distributes income on a semi-annual basis.
The retail division emerged as the strongest contributor to Sunway REIT’s overall performance. Revenue from the segment rose 10% to RM185.0 million, while NPI surged 17% to RM136.3 million.
The growth was largely driven by the completion of refurbishment works at Sunway Carnival Mall, stronger contributions from AEON Mall Seri Manjung after its acquisition, and reduced utility expenses following new electricity tariff rates introduced in July 2025.
Sunway Carnival Mall performed particularly well, recording more than 16% year-on-year growth in retail sales per square foot during the quarter. This strengthened its position as one of the preferred shopping destinations in mainland Penang.
Despite the strong retail performance, the hotel segment experienced weaker results. Revenue declined 19% to RM13.0 million, while NPI fell 21% to RM11.8 million.
The decline was attributed to slower travel activity after the year-end holiday season and during Ramadan. In addition, ongoing conflicts in the Middle East disrupted flight operations and increased travel costs, affecting tourism demand.
However, two hotels managed to perform positively. Sunway Putra Hotel benefited from stronger group bookings from tourists from China and India, while Sunway Hotel Seberang Jaya maintained stable demand due to medical travellers visiting the nearby Sunway Medical Centre Penang.
The office segment remained relatively stable despite a slight decline in revenue caused by lower occupancy at Wisma Sunway. Management stated that a new tenant has already been secured, and the building is expected to achieve full occupancy by the fourth quarter of 2026.
Meanwhile, the industrial and other properties segment recorded the highest percentage growth during the quarter. Revenue increased 15%, while NPI rose 21%, mainly due to improved occupancy at Sunway REIT Industrial – PJ 1.
Chief executive officer Derek Teh Wan Wei said the REIT’s diversified portfolio helped maintain stability despite weaker hotel market conditions.
He also noted that finance costs declined by 10% because of lower borrowings and reduced average interest rates, which contributed positively to the company’s profit growth.
Looking ahead, the management remains cautiously optimistic and plans to continue focusing on operational excellence, asset enhancement initiatives, tenant mix optimisation, and sustainability improvements to strengthen the long-term value of its properties.
Singapore