Sunway REIT expected to post stronger third-quarter earnings, supported by hotel segment

Highlights

HLIB Research expects Sunway REIT to post 3QFY2026 core profit of around RM120 million to RM134 million, with nine-month contributions of approximately RM347 million to RM361 million.
Sunway Putra Hotel and Sunway Resort Hotel have recorded a strong recovery amid an increase in international visitors, while banquet occupancy rose to 59% in 1H2026.
FY2026-FY2028 core net profit forecasts were raised by up to 4%, the target price was increased to RM2.31, and the RM462 million Sunway Pier project in Port Klang is expected to be completed in 2028.

This article was translated from the original. Read the original version by our correspondent here.

Earnings outlook and hotel segment drivers

As reported by The Edge Malaysia, citing HLIB Research, Sunway REIT is projected to post 3QFY2026 core profit of around RM120 million to RM134 million, bringing cumulative core profit for the nine months to approximately RM347 million to RM361 million, equivalent to 72% to 75% of the research firm's full-year forecast.

HLIB said its estimates were based on the historical contribution of 25% to 28% of full-year core profit in the third quarter from FY2022 to FY2025. The firm said the third quarter has consistently been stronger than the second quarter because it is the peak season for the hotel segment.

The hotel recovery is also continuing to strengthen the outlook. According to HLIB, Sunway Putra Hotel and Sunway Resort Hotel have shown a stronger recovery, driven by increased visitor arrivals from the Middle East, China, India, Asean countries and airline crews.

HLIB also said bookings slowed for about three months from late February following a reduction in government spending, which led agencies to hold fewer events. Conditions have now returned to normal, with banquet occupancy rising to 59% in 1H2026, supported by catering services and sporting events.

Forecast revisions and asset growth plans

Following the better-than-expected recovery in hotel revenue, HLIB raised its core net profit forecasts for Sunway REIT for FY2026 to FY2028 by 2.8%, 4% and 2.4%, respectively. The research firm also raised its target price to RM2.31 from RM2.24, while maintaining its buy recommendation on the REIT.

Meanwhile, the RM462 million Sunway Pier project in Port Klang remains on track for completion by 2028. The redevelopment project is part of Sunway REIT's plan to enter Klang, which management views as a market that remains relatively untapped.

To bridge the earnings gap while awaiting Sunway Pier's completion, Sunway Hotel Seberang Jaya is targeted for completion by the end of 2027. Contributions from existing hotels, together with the addition of new assets, are expected to continue supporting the REIT's earnings trajectory over the next few years.

The virtual launch of Sunway Velocity 3 Tower C signals sustained residential demand after Towers A and B recorded a take-up rate of 98% within two years. In our previous coverage, Sunway Property recorded more than 100 unit bookings online through its new digital portal, with its direct access to Sunway Velocity Mall and the Maluri MRT/LRT network among its key attractions. The digital booking approach also shows how the Sunway group is adapting its sales strategy to current buying patterns in the Kuala Lumpur market.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.