Hektar REIT recorded RM24.6m in revenue for 2Q, a decline of 29.2%

By ANIS FARHANAH MALEK
anisfarhanah@dagangnews.com

KUALA LUMPUR 26 August - Hektar Asset Management Sdn. Bhd., the manager of Hektar Real Estate Investment Trust (Hektar REIT) announced that the latter achieved RM24.6 million in gross revenue for the second quarter ended June 30 2020, a drop of 29.2% from the corresponding period in the previous year (RM34,7 million).

While the Property Operating Expenses decreased 23.4% from previous year during the quarter, the Net Property Income (NPI) for the quarter is lower by 34.4% than the preceding quarter at RM12 million.

The dip in gross revenue and NPI compared to the previous year is due to the temporary semi-closure of the shopping centres to comply with the guidelines set by the government’s Movement Control Order (MCO) which commenced on 18 March 2020.  

Chief Executive Officer of Hektar Asset Management, Datuk Hisham Othman said, ever since MCO was implemented, visitor traffic had dropped greatly due to prohibition of large gathering and ban on leaving homes unless for essential purposes.

“The visitor count improved during the Recovery MCO period which begun on 10 June and we believe this is due to the pent-up demand from customers. We hope that the situation will continue to show recovery.

"We are playing our part to ensure shopper health and safety within our malls is taken care of, to bring back confidence to consumers. However, clearer results will only be seen in the next quarter.

"Currently we remain focused on recovery efforts including targeted sales promotions focusing on retailer sales in all of our centres,” said him in a statement today.

Meantime, Hektar REIT recorded earnings per unit (EPU) of 0.32 sen for the second quarter ended June 30, 2020. In the first quarter, Hektar REIT secured a moratorium on its debt facilities in line with government initiatives.

As a result, the REIT was granted deferment of interest on financing facilities for a period of six months from 1 May to 31 October 2020.

As a condition, no dividends are allowed to be paid until full settlement of deferred interest on financing facilities.

However, Hektar REIT management remains committed to paying at least 90% of distributable net income to unit holders for financial year of 2020.

Hektar REIT saw portfolio leasing activities was slow during the quarter due to the MCO.

However, its portfolio occupancy remained steady at 90.7% despite the current challenges faced by the retail industry.

Portfolio rental reversions for the quarter was 30.3% higher than previous rental, albeit only seven new and renewed tenancies were completed which represented 6,356 square feet or 0.3% of the total portfolio Net Lettable Area.  – DagangNews.com