KUALA LUMPUR (Jan 17): KIP Real Estate Investment Trust (KIP REIT)’s net property income rose 41% in the second quarter ended Dec 31, 2019 (2QFY2020) to RM14.73 million from RM10.45 million a year ago, following the acquisition of AEON Mall Kinta City mid last year.
The group’s distributable income grew 17.5% year-on-year to RM9.4 million versus RM8 million in the previous year. The group announced a distribution per unit of 1.76 sen for the quarter, which represents a 95% income distribution rate.
Based on Jan 16's closing price of 90 sen, the annualised DPU gives a yield of 6.8%, it said in a statement yesterday.
“We are proud to announce another quarter of strong performance. This was underpinned by the five months contribution from AMKC which we acquired in July last year.
"As part of our acquisition strategy to enlarge the total asset (under management) to RM1.5 billion within the next 5 years, we will continue to look for areas of expansion and identify yield-accretive assets for acquisition in the coming financial years,” said Datuk Chew Lak Seong, managing director of KIP REIT Management Sdn Bhd.
In the six months ended Dec 31, the REIT's net property income grew 38.5% to RM28.23 million from RM20.39 million a year ago. Distributable income rose marginally to RM15.43 million from RM15.39 million previously.
Looking ahead, Chew said the Malaysian retail industry will continue to face challenges resulting from external and internal factors including trade uncertainties, global economic conditions and limited fiscal policies aimed at stimulating consumer spending.
“Notwithstanding these, as a proactive REIT manager, we will strive to drive organic growth from our existing portfolio, through proactive leasing efforts and completion of asset enhancement initiatives to improve the overall occupancy rate and net property income on top of cost saving initiatives from the introduction of solar panels. We will continue to focus on delivering sustainable income distributions to unitholders and is confident that the underlying strength of KIP REIT’s portfolio of quality retail malls and continue to create long-term value for our unitholders,” he said.
KIP REIT closed 0.56% or 0.5 sen higher to 90 sen yesterday, valuing it at RM454.77 million.