KUALA LUMPUR: Hektar Real Estate Investment Trust (REIT) has registered net property income, comprising bought or leased properties, of a 4.2% increase to RM18.7 million for the second quarter of 2014 (2Q14). Net profit increased 6.1% to RM11.5 million from RM10.8 million last year, while revenue increased 1.8% to RM30.2 million from RM29.7 million.
“The asset enhancement initiative (AEI) at Central Square, a retail shopping centre in Sungai Petani, Kedah, is at its final stage now and is expected to be completed by 2015,” said chief executive officer Datuk Jaafar Abdul Hamid in a press statement. “We anticipate Central Square to be the main growth driver for the financial period following the completion of the AEI.
“The temporary lower occupancy rate during the AEI period provides us with the opportunity to improve the tenancy mix and to bring in better tenants. We hope to replicate our success with Wetex Parade in Central Square — where new tenancies have contributed towards good rental reversion rates post AEI.”
He said the remaining malls in the group’s portfolio have recorded stable performances for 2Q14.
“Albeit the utility and operation cost hikes, the steady performances of our malls have managed to compensate for the rising costs and hence we expect our performance to remain flattish this year,” said Jaafar. “We are, however, cautious over tenants’ sales growth in the run-up to the implementation of the goods and services tax.”
Hektar REIT declared a second distribution per unit of 2.60 sen, maintained with the distribution declared in the previous year’s corresponding quarter. Payment of the second quarter distribution will be made on Sept 17, 2014.
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.
This article first appeared in The Edge Financial Daily, on August 22, 2014.
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