KUALA LUMPUR (July 26): CapitaLand Malaysia Mall REIT Management Sdn Bhd (CMRM), the manager of CapitaLand Malaysia Mall Trust (CMMT), announced today that CMMT achieved net property income (NPI) of RM53.4 million for the second quarter of its financial year ending Dec 31, 2018 (2QFY18), which was 10.8% lower than its 2QFY17 NPI of RM59.8 million.

In a filing to Bursa Malaysia yesterday, CMMT said Gurney Plaza in Penang and East Coast Mall in Kuantan recorded stronger performances that partially mitigated lower contributions from its Klang Valley shopping malls, including Sungei Wang, which is currently undergoing asset enhancement to reconfigure its annex space into a new lifestyle zone, called "Jumpa".

CMMT said its distributable income for 2QFY18 was RM40.8 million and distribution per unit (DPU) for the quarter was 2 sen.

The total DPU for the first half of 2018 was 4.02 sen. The annualised DPU of 8.11 sen for the period translates to an annualised distribution yield of 6.6%, based on CMMT's closing price of RM1.23 per unit on July 24.

As CMMT's DPU is paid out on a half yearly basis, unitholders will be paid their first-half DPU on Aug 30.

CMRM chairman David Wong said consumer sentiment in Malaysia has improved since the zero-rating of the goods and services tax, and he anticipates this optimism to lead to an increase in retail sales.

"However, lingering concerns over rising costs of living, the rising popularity of e-commerce and an increasing shopping mall supply will continue to impact the retail operating environment.

"Notwithstanding the challenges, we are positive that the underlying strength of CMMT's portfolio of quality assets will sustain CMMT's performance through different economic cycles and deliver sustainable income distributions for unitholders over the long term," he said.

CMRM chief executive officer Low Peck Chen said the group overcame industry headwinds to achieve a positive rental reversion of 0.3% in 2QFY18.

"During the quarter under review, Gurney Plaza and East Coast Mall continued to chart year-on-year revenue growth, which reaffirmed their leading position in the Northern region and East Coast region of Peninsular Malaysia respectively.

"To further strengthen East Coast Mall's appeal, we have completed the enhancement works on Level 1 to create an international fashion cluster featuring new brands that will be fully opened next month. Anchor tenant Parkson has also commenced renovation works to transform its outlet at East Coast Mall into a flagship store in the East Coast region by October 2018," she said.

She added that during the quarter, the group continued its efforts to rejuvenate 3 Damansara (formerly Tropicana City Mall) with a rebranding campaign, introduction of new casual dining concepts and upgrading of mall amenities.

"In line with our digital strategy to enhance shopper engagement, the CapitaStar rewards programme is on track to launch its mobile application in the second half of 2018. Looking ahead, we will continue to focus on active asset management, asset enhancement initiatives and proactive leasing strategies to strengthen our portfolio's attractiveness and relevance for shoppers and tenants," she said.

CMMT closed up 0.81% yesterday to RM1.24, and for a market capitalisation of RM2.53 billion. — theedgemarkets.com

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