MRCB-Quill REIT 1Q NPI up 39.9% on higher revenue

KUALA LUMPUR (May 4): MRCB-Quill Real Estate Investment Trust (MQREIT) posted a 39.9% increase in net property income for the first quarter ended March 31, 2017 to RM37.14 million from RM26.54 million a year earlier on higher revenue.

Its quarterly revenue was up 38% at RM46.57 million compared with RM33.75 million a year ago. The company attributed the increase to additional revenue arising from the acquisition of Menara Shell at the end of last year, higher rental income due to step-up rent adjustments from QB3-BMW, Wisma Technip and QB2-HSBC.

In a filing with Bursa Malaysia today, MQREIT said no income distribution was proposed for the current quarter as MQREIT's income distribution is paid on a half-yearly basis.

MQREIT said it intends to distribute at least 90% of its distributable income at least semi-annually, or at such other intervals as the manager may determine.

"MQREIT's portfolio continues to perform well and has maintained a healthy net property income margin of 80% in 1Q2017, compared with 79% in the corresponding quarter," said MRCB Quill Management Sdn Bhd (MQM) chairman Tan Sri Saw Choo Boon in a separate statement today.

"This was achieved through our proactive approach towards asset and portfolio management and continuing efforts in managing MQREIT's operational cost effectively," said Saw.

"Despite the challenging office market environment, we remain optimistic that MQREIT's portfolio of quality assets, with a healthy weighted average lease expiry of 5.6 years will continue to deliver stable income to the fund," he added.

Meanwhile, MQM CEO Yong Su-Lin said: "MQREIT has a well-spread portfolio lease expiry profile with 14% of its total leased net lettable area due for renewal in 2017. Two percent of these leases due in 2017 have been successfully renewed."

"Negotiations with the tenants are progressing as scheduled for the leases due in the second and third quarter of 2017. MQREIT's average occupancy rate as at March 31, 2017 stood at 97%," she added.

Moving forward, MQREIT said the office market is expected to remain challenging with the slowdown of the global and domestic economies and low crude oil prices.

"While we expect that take-up rates in Klang Valley will be dampened, we are confident our leasing strategies will ensure that the performance of MQREIT's portfolio remains stable in 2017," said MQREIT.

At 2.27pm, shares in MQREIT were up one sen or 0.78% to RM1.30 for a market capitalisation of RM1.39 billion. —

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