Hektar REIT declares 2.3 sen DPU for 1QFY17

KUALA LUMPUR (May 22): Hektar Real Estate Investment Trust's (REIT) net property income slipped 5.3% to RM17.7 million for the first quarter ended March 31, 2017 (1QFY17) from RM18.67 million a year earlier, due to higher operating expenses.

The REIT announced a distribution per unit (DPU) of 2.3 sen for the quarter under review, to be paid on June 22. The book closing date for the distribution is on June 6.

In a statement today, Hektar REIT said realised net income has further reduced by 10.1% to RM9.6 million in 1QFY17 from RM10.71 million in 1QFY16 due to higher provisions on receivables, in line with weaker economic conditions.

Quarterly revenue was down 2.4% to RM30.86 million from RM31.6 million a year ago.

Hektar REIT chief executive officer Datuk Hisham Othman said that despite the challenging retail outlook, management is focused on improving value through asset enhancement initiatives (AEIs) and completing the proposed acquisition of the 1Segamat Shopping Centre in Johor.

"We have just received the approval from Bursa Malaysia on the proposed listing of rights issue to part finance the said acquisition, and we are working towards completing the proposed acquisition by September.

"The addition of 1Segamat mall into Hektar REIT's portfolio of neighbourhood malls is expected to strengthen [the REIT's] position, both financially and strategically," he said.

He added that the AEIs in Landmark Central Mall in Kulim, Kedah, will be completed in the third quarter of the year.

"We have successfully secured several new brands for the additional lots created at Landmark Central. Both the proposed acquisition and the AEI will add value to the REIT," said Hisham.

Apart from Landmark Central, Hektar REIT's portfolio of shopping malls includes Subang Parade in Subang Jaya, Selangor, Mahkota Parade in Melaka, Wetex Parade in Muar, Johor, and Central Square in Sungai Petani, Kedah.

The portfolio's catchment serves a market size of three million shoppers, and had an average occupancy of 96.2% as at Dec 31 last year. The REIT has also recorded over 30.1 million shopper visits.

Hektar REIT maintains a distribution policy of at least 90% of distributable net income.

At the closing bell today, Hektar REIT shares were up one sen (0.65%) to RM1.56 and for a market capitalisation of RM624.9 million. — theedgemarkets.com

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