Sunway REIT invests nearly RM1b in Sunway Putra Place 

Sunway REIT Management Sdn Bhd, which bought the Sunway Putra Place property in Kuala Lumpur during a public auction in 2011 for RM522mil, plans to inject RM460mil to enhance the assets.

Unveiling the accelerated refurbishment plan for the property - which includes a retail mall, hotel and office tower - on  Friday, it said the move was to reap the full synergies and compatibility of the three-in-one mixed use asset upon its expected completion in the first half of 2015.

The refurbishment of Sunway Putra Place involves enhancing the architecture, comprehensive space reconfiguration and improving the infrastructure. This would create additional net lettable are of about 15% to 580,000 sq ft for Sunway Putra Mall.

Sunway Putra Hotel's refurbishment would involve modernising the lobby, ballroom, function and meeting rooms, restaurants and upgrading rooms and suites.

As for the Sunway Putra Tower, the common areas would be enhanced and this would involve improved facilities and security.

Sunway REIT Management Sdn Bhd CEO Datuk Jeffrey Ng described Sunway Putra Place as an "undiscovered gem for use to exhibit in turning around an underperforming and depressed asset".

Any investment won't cause profit to drop off suddenly one.

Since reit generally doesn't have much cash in hand (due to at least 90% realised profit being channeled to distribution), so generally any new investment will be made through loan, or new unit issuance (depended on the reit manager).

So new investment may means more leverage/borrowing needed,
or more unit may need to issue to fund the new investment.

New unit issuance may dilute the realised EPS, but if the new investment can contribute more profit to the reit, it can nullify the dilution effect.

Reit is required to pay at least 90% of its profit as distribution to get the tax exempted status.
So reit cannot say draw half of profit to purchase new property, and only left half for distribution.

So as long as the realised profit (EPS) is not affected, then distribution won't be affected.