Hektar REIT posts over RM9m profit

KUALA LUMPUR: Hektar Real Estate Investment Trust (Hektar REIT) posted a net profit of RM9.13 million for 2Q 2010, up 3% compared to the preceding year’s corresponding period, it announced on Wednesday, Aug 4.

The retail mall REIT generated revenue of RM45.29 million for the quarter ended June 30, 2010. The revenue comprises rental income of RM45.21 million, interest income of RM68,418 and other income of RM6,332.

The trust attributed the results to higher turnover rent in 2010 and the application of Financial Reporting Standard 117 (FRS 117) effective Jan 1, 2010. A second interim income distribution of 2.5 sen per unit amounting to RM8 million for 2Q 2010 has been approved by the trustee.

“We are comfortable with the results as the REIT is still demonstrating positive growth compared to last year. As such, we will maintain this quarter’s dividend rate at 2.5 sen per unit,” said Hektar Asset Management CEO Datuk Jaafar Abdul Hamid.

In a filing to Bursa on Aug 4, the company said that it would continue to be cautiously optimistic about the Malaysian retail sector in 2010.

However, the trust will continue to explore and negotiate potential acquisition opportunities and look for ways to optimise its property portfolio to improve capital values by refurbishing its existing malls.

Among the refurbishment works undertaken was Mahkota Parade in Melaka, which was completed in May 2010.

“The refurbishment and re-launch of Mahkota Parade has been fruitful as occupancy and rental reversions are showing positive signs,” said Jaafar. 

Mahkota Parade’s occupancy has improved to approximately 96.9%, and rental reversions saw an average 7% increase for the recent quarter.

“In Subang Parade, we have fresh challenges as we now have new space within the shopping centre,” Jaafar said on the company's other mall in Subang Jaya.

“We view this as an opportunity to freshen the tenant mix by introducing new retailers. My team is currently working on a couple of concepts,” he added.

Subang Parade’s occupancy dipped to 94.6% in the recent quarter.