Sunway REIT’s Yield Compresses to 5.5% as Share Price Rally Caps Upside Potential

Sunway REIT’s FY26F yield remains compressed at 5.5%, narrowing its spread to 200bps against the 10-year MGS of 3.5%, following a significant share price rally. The REIT’s 9M25 distributable income surged 35.9% year-on-year to RM338.7 million, driven by robust retail performance, new asset acquisitions, and gains from the Sunway University & College campus disposal. Revenue and net property income both rose 22% YoY, supported by Sunway Pyramid, Carnival Mall, and recently added assets such as Kluang Mall and Aeon Mall Sri Manjung.

Sunway REIT

Gearing is expected to decline below 38% after the RM500 million MTN repayment in October 2025. Retail and industrial segments maintained strong occupancy, while the hotel segment rebounded with higher occupancy and rates. With the yield spread below historical averages and upside capped below 15%, the HOLD recommendation with a RM2.32 target price remains appropriate. Source: AmBank

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