KUALA LUMPUR (April 23): IGB Real Estate Investment Trust’s net property income (NPI) fell 14.6% to RM88.39 million for the first quarter ended March 31, 2020 (1QFY20) from RM103.48 million a year ago.

In a filing with Bursa Malaysia, the REIT attributed the lower income to the rental support provided to tenants, and lower car park income, arising from the Covid-19 pandemic and Movement Control Order (MCO) since mid-March.

Revenue dropped 11.5% to RM125 million from RM141.23 million in 1QFY19, due to rental income falling by 15.2% to RM88.47 million from RM104.38 million.

IGB REIT announced an income distribution of 92.5% of its distributable income amounting to RM69.1 million or 1.94 sen per unit, payable on May 29.

On prospects, IGB REIT said the Covid-19 pandemic and MCO are having a profound negative impact on the shopping mall business.

Quoting Retail Group Malaysia, IGB REIT said shopping traffic is estimated to have declined by up to 50%, with the retail industry registering an 18.8% contraction in the first quarter.

As a result of the prolonged Covid-19 pandemic and falling domestic demand, the retail industry will contract by 5.5% for the entire year, it added.

Previously, RGM had projected Malaysia’s retail industry to grow by 4.6% in 2020.

“Despite the grim outlook and many challenges ahead, IGB REIT is determined to remain resilient throughout the Covid-19 pandemic, and is committed to long-term value for stakeholders,” it said.

The counter closed unchanged at RM1.70 yesterday on volume of 2.12 million shares. Year to date, it has fallen by some 10%.

At its current price, IGB REIT has a market capitalisation of RM6.04 billion.

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