'SunCity property trust delayed'

Given that the proposal to list the REIT, with an estimated property size of RM4 billion, has yet to be submitted to the authorities, sources say SunCity may miss its target

SUNWAY City Bhd (SunCity) has delayed plans to list its property trust, touted to be Malaysia's biggest, to next year, sources told Business Times.

The real estate investment trust (REIT), with an estimated property size of RM4 billion, was scheduled to be listed this year, three-and-a-half years since it first announced its intention to spin off a REIT.

Given that the proposal has yet to be submitted to the authorities, sources say SunCity may miss its target.

"Looking at the timeline required to list it and to have an effective roadshow in November or December is slim. As such, there will be a delay in the listing," a source said.

The delay may work to its advantage as markets around the world are not in good shape, rattled by worries over the global economy and high oil prices.

Malaysia's stock market has lost some 23 per cent so far this year.

The delay in the submission process is attributed to the large number of assets that SunCity plans to put into the REIT. The trust could end up having up to eight properties.

"Due to the number of assets and the diversity of the properties involved in sectors ranging from retail, hospitality and commercial, procedures for evaluation take a much longer time.

"It has taken SunCity longer than initially anticipated," the source said.

SunCity's executive director Datuk Jeffrey Ng Tiong Lip, when contacted, did not confirm nor deny the delay, but said the group is looking at other options.

"The SunCity REIT is still moving forward. We are preparing the relevant documents. There are quite a number of assets involved and things like due diligence and valuation reports to be done in the process.

"In view of the softer market condition, SunCity is also evaluating other options on the structure of a REIT," he said, adding that pricing and packaging were important elements.

Ng, however, declined to elaborate what the other options may be.

Meanwhile, it is understood that SunCity is still weighing its option of whether to list on Bursa Malaysia or on the Singapore Stock Exchange.

SunCity has hired RHB Investment Bank Bhd, CIMB Investment Bank Bhd, US bank Goldman Sachs and Swiss lender UBS to help the company set up and list the property trust.

It plans to inject Sunway Pyramid, Sunway Carnival, Sunway Lagoon Resort Hotel and the Pyramid Tower, Menara Sunway, Monash University and its hostels.

Properties that are likely to be injected at a later stage include the recently-acquired Wisma Denmark, Sunway Medical Centre (which is undergoing expansion), the proposed KL South shopping mall in Cheras, and four office towers in Bandar Sunway that the group has proposed to build.