KUALA LUMPUR: CapitaMalls Malaysia Trust (CMMT), a shopping mall real estate investment trust, will embark on the next phase of asset enhancement initiative (AEI) works at East Coast Mall in Kuantan soon to improve the retail mix and visibility of retailers.
CMMT has allocated RM60 million for the works over 2013 and 2014, of which RM22.4 million was incurred during Phase 1 which saw the conversion of its car park on the third floor to retail space.
Its chief executive officer Sharon Lim said its AEI works on its properties in general provide returns on investment “of 8% onwards”.
“We will continue to proactively look for opportunities to enhance the other malls in our portfolio to further increase unitholder value,” she said at CMMT’s results media briefing for the financial year ended Dec 31, 2013 (FY13) here yesterday.
Lim does not see the possibility of a rise in interest rates, as a major concern.
In CMMT’s debt portfolio, its fixed rates portion makes up 73%, while floating interest rates takes up the remaining 27%.
CMMT saw its distribution per unit for its fourth quarter ended Dec 31, 2013 (Q4FY13) rising 6.2% to 2.24 sen from 2.11 sen a year ago.
Net property income for 4QFY13 rose 10.8% to RM54.8 million on the back of a 6.8% increase in revenue to RM78.8 million. Distributable income grew 6.6% year-on-year to RM39.8 million.
For FY13, revenue jumped 5.5% to RM305.1 million due to higher rental rates achieved from new and renewed leases, onselling of electricity to tenants at The Mines in Selangor, and completion of Phase 1 AEI works at East Coast Mall.
Last year, CMMT’s portfolio recorded a positive 7.5% in rental reversions in all properties except Sungei Wang Plaza in Kuala Lumpur which saw a negative rental reversion of 3.7%.
Lim attributed the negative rental reversion to the construction of the mass rapid transit around the Plaza which had affected shopper traffic. For FY14, Lim said CMMT is confident of delivering stable distributions to unitholders.
“Our malls still have strong appeal among shoppers and retailers, with the occupancy rate increasing slightly to 99% as at end-2013,” she said.
CMMT’s portfolio comprises Gurney Plaza in Penang, Sungei Wang Plaza, The Mines and East Coast Mall.
This article first appeared in The Edge Financial Daily, on January 24, 2014.
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