Hektar REIT 2Q realised net income up 3.4%, pays 2.6 sen DPU

KUALA LUMPUR (Aug 14): Hektar Real Estate Investment Trust (Hektar REIT)’s realised net income came in 3.4% higher at RM11.9 million for the second quarter ended June 30, 2015 (2QFY15) from RM11.5 million a year ago, as its net property income improved 5.6% to RM19.7 million.

It also announced a distribution per unit (DPU) of 2.6 sen for the period — payable on Sept 18 — which is comparable to the previous year’s DPU. The counter will go ex-dividend on Sept 1.

In a filing on Bursa Malaysia today, Hektar REIT said its revenue for 2QFY15 was RM30.9 million, up 2.6% from RM30.2 million in 2QFY14.

Meanwhile, for its cumulative six months (1HFY15), realised net income was 4.6% higher at RM22.9 million compared with RM21.9 million in 1HFY14, as net property income improved by 5.7% to RM38.3 million.

For the cumulative six months ended June 30 (1HFY15), revenue was at RM62.2 million, up 3% from RM60.4 million previously, mainly due to positive rental reversions at Subang Parade and improved revenue from Central Square after the completion of its asset enhancement initiative (AEI) there.

“With commencement of the tenancy with MBO in Central Square, the occupancy rate has now improved to 97%. This has brought about a healthy rental reversion of 21.4% where previous rental rates were suppressed prior to our tenant remixing exercise and asset enhancement initiative.

“We will be relaunching the shopping centre in September 2015, and we are excited to see Central Square grow into a modern and family-friendly shopping centre,” said Hektar REIT chief executive officer Datuk Jaafar Abdul Hamid in a press statement.

Going forward, Hektar REIT said it is exploring plans for further AEI at Landmark Central to improve its yields.

“There was a softening in the retail market, especially post-GST in the month of April, which led to negative reversion recorded at Mahkota Parade. We remain cautiously optimistic of the retail performance for this financial year and hope to see improvements in the following quarters,” Jaafar said.

Hektar REIT’s portfolio of shopping malls include Subang Parade in Subang Jaya, Selangor; Mahkota Parade in Melaka; Wetex Parade in Muar, Johor; Central Square in Sungai Petani, Kedah; and Landmark Central in Kulim, Kedah.

The portfolio’s catchment serves a market size of 3.0 million shoppers. As at end of the preceding financial year, FY14, the portfolio had an average occupancy of 94.3% and recorded over 30.8 million shopper visits, its statement read.

Hektar REIT closed 2 sen or 1.33% lower at RM1.48 today, for a market capitalisation of RM600.95 million.