KUALA LUMPUR (April 25): Capitaland Malaysia Mall Trust's (CMMT) net property income (NPI) fell 4.5% year-on-year in the first quarter of its financial year 2018 (1QFY18), dragged by lower contribution from its Klang Valley shopping malls and an office tower.

NPI came in at RM57.05 million during the quarter that ended March 31 (1QFY18), from RM59.72 million a year ago, as lower contributions from Sungei Wang, Tropicana City Property and The Mines offset higher rental rates achieved from the group's Gurney Plaza and East Coast Mall. Quarterly revenue slipped 2.9% to RM89.73 million from RM92.44 million, CMMT's bourse filing yesterday showed.

Distribution per unit slid 2.9% y-o-y to 2.02 sen, from 2.08 sen; distributable income slid to RM41.22 million from RM42.32 million.

In a separate statement, CMMT said its annualised DPU for the quarter was 8.19 sen, which translates into an annualised distribution yield of 7.1%, based on CMMT’s closing price of RM1.15 per unit on April 23, 2018.

Unitholders can expect to receive their DPU for 1QFY18, together with their DPU for the quarter 2QFY18, by August 2018, the filing noted.

David Wong, chairman of the REIT's manager Capitaland Malaysia Mall REIT Management Sdn Bhd (CMRM), noted Malaysia’s economy is expected to grow by 5.5% to 6.0% this year, led by strengthening domestic demand and a resilient export sector. 

However, Wong opins that local retail operating environment will remain "challenging", in view of ongoing concerns about rising costs of living and growing competition from new shopping malls. 

Nevertheless, he said CMMT "remains committed to delivering sustainable returns for unitholders by enhancing property yields through asset enhancement initiatives, and [by] introducing new retail concepts.”

CMRM’s chief executive officer Low Peck Chen, meanwhile, said CMMT has achieved a positive rental reversion of 2.2%, while its portfolio occupancy remained stable, registering 93.7% as at March 31, 2018.

“To improve the diversity of the tenant mix in our malls, we are expanding the food and beverage options at The Mines’ Level 3 and Tropicana City Mall’s ground floor. Shoppers can also look forward to new international fashion labels at East Coast Mall’s Level 1, when the area completes the asset enhancement works in 2QFY18,” Low added.

For its Sungei Wang Mall, Low said CMMT plans to reconfigure the annex space into a vibrant and energetic lifestyle zone that complements retail offerings in the BBKLCC shopping belt, which will be rebranded as Jumpa and targeted to be completed by 1QFY19.

CMMT units closed one sen or 0.87% lower at RM1.14 yesterday, giving it a market capitalisation of RM2.33 billion. — theedgemarkets.com

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