KUALA LUMPUR (April 20): KIP Real Estate Investment Trust's (KIP REIT) net property income (NPI) for the third quarter ended March 31, 2021 fell 5.9% to RM13.69 million, from RM14.56 million a year ago, on the back of lower revenue.

Its quarterly revenue slipped 7.33% to RM17.99 million from RM19.42 million a year ago, its filing to Bursa Malaysia showed.

The group proposed a third distribution per unit (DPU) of 1.6 sen, which will be paid on May 25.

The group said the drop in revenue was attributed to RM1.6 million lower revenue from both the Southern and Central regions but partially cushioned by higher revenue from AEON Mall Kinta City in the Northern region.

According to the group, included in the revenue of the Southern and Central regions was the amortisation of rental rebates amounting to RM300,000 offered to non-essential tenants affected by the Movement Control Order (MCO) and additional rental assistance offered to affected tenants during MCO 2.0 announced on Jan 13, 2021 amounting to RM500,000.

“The NPI also came in lower in tandem with the lower revenue as compared to preceding year corresponding quarter at a lower negative variance on the back of cost management,” it said.

For the nine months ended March 31, 2021, the group’s NPI dipped 2.8% to RM41.59 million, from RM42.79 million a year earlier.

Its revenue for the period also dropped by 4.85% to RM54.85 million, from RM57.64 million a year earlier.

While the overall retail landscape has been challenging, the group said the community-centric segment has shown relatively stronger resilience during the pandemic as the business model is focused on catering to localised traffic.

“As we move forward, we recognise that uncertainties over the economy’s health and the Covid-19 pandemic still loom, at the very least for the first half of the year.

“We are hopeful that the economy will return to pre-pandemic levels by year-end. We will continue to monitor the situation closely,” it said.

As the health and safety of its tenants and shoppers are of precedence, the group said it will adopt quick responses to changes in standard operating procedures where necessary, as the situation evolves.

“On the whole, our priority to provide long-term value to our unitholders and support fund growth undoubtedly remains as we continue to explore yield accretive assets for potential acquisitions," it said.

KIP REIT closed 0.5 sen or 0.56% lower at 88.5 sen today, valuing the group at RM449.71 million.

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