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KUALA LUMPUR: Quill Capita Trust (QCT) saw its net profit decline 3.88% to RM8.56 million in its second financial quarter ended June 30, 2014, on higher property operating cost, finance cost and valuation fee.
Revenue was flat at RM17.35 million compared with RM17.27 million in the previous corresponding period, when it raked in a net profit of RM8.91 million.
It also announced a distribution per unit (DPU) of 4.10 sen, to be distributed on Aug 29 this year. The DPU translates to a yield of 7% based on QCT’s closing price of RM1.17 on June 30, 2014.
In a statement yesterday, the real estate investment trust (REIT) said although it saw higher rental income and utility recoveries from some properties, the increase was offset by slightly higher property operating cost, finance cost and valuation fee.
Property operating expenses were up by 7.1% due to higher repair and maintenance costs, it explained, adding that this resulted in lower net property income by 1.4%. Finance costs were higher by 5.7% during the current quarter mainly due to write-back of credit facility costs in the second quarter of 2013.
For the six months ended June 30, 2014, the REIT posted a net profit of RM16.72 million, down 1.72% from RM17.02 million a year ago. Revenue remained flat at RM34.53 million against RM34.5 million in the corresponding period in 2013.
QCT said 31% of its total net lettable area is due for lease renewal in 2014. As at the second quarter, 24% of these leases have been renewed, with the balance only due for renewal in the third and fourth quarter.
“The manager has initiated discussions with tenants on the renewals due in the third and fourth quarter with the intention to lock in the tenancies ahead of their expiry,” it noted.
Moving forward, QCT said the steady demand for commercial space in the Klang Valley will keep the office rental market competitive and will likely lead to stable average occupancy rates.
This article first appeared in The Edge Financial Daily, on July 23, 2014.
