Tower REIT FY14 DPU drops 34% to 7.03 sen

KUALA LUMPUR (Jan 28): Tower Real Estate Investment Trust (Tower REIT) recorded a distribution per unit (DPU) of 7.03 sen a share for the financial year ended Dec 31, 2014 (FY14), down 34.3% from 10.7 sen paid out in FY13.

The REIT, which is part of the Hong Leong group, announced today a final DPU of 3.2 sen for the six months ended Dec 31, 2014, down from 5.61 sen in the previous corresponding period. It had earlier paid 3.83 sen per unit in August.

A filing to Bursa Malaysia today showed Tower REIT’s FY14 realised income fell sharply to RM21.36 million, from RM32 million previously; while gross revenue dropped to RM44.48 million, from RM52.87 million.

Nevertheless, net profit rose to RM48.73 million, from RM32.67 million previously, due to unrealised income of RM27.38 million.

The trust noted its prospects remain challenging due to a glut in office space, including a difficult operating environment.

It noted both office occupancy and rental rates continue to face strong challenges, due to incoming supply of newer buildings with better specifications and limited demand growth.

Tower REIT owns Menara HLA, HP Towers and Menara ING. In order to unlock value, it recently announced it is disposing of 19 office parcels and 190 car park bays within Menara ING in Jalan Raja Chulan for RM132.34 million cash, which will result in a gain of RM40.4 million for the trust.