KIP REIT 1QFY23 earnings improve on low base effect

• Going forward, executive director Datuk Eric Ong Kook Liong said the REIT's core strategy will be to continue to pursue high quality accretive acquisitions to support sustainable distribution payout to unitholders.

KUALA LUMPUR (Oct 26): KIP Real Estate Investment Trust's (REIT) net property income for the first quarter ended Sept 30, 2022 (1QFY23) grew 4.8% to RM14.33 million, up from RM13.67 million a year ago, mainly due to low base effect as operations were affected by Covid-19 lockdowns last year.

Revenue was 13% higher at RM19.35 million for the quarter under review, compared with RM17.14 million for 1QFY22, the REIT said in a stock exchange filing on Wednesday (Oct 26).

KIP proposed a first income distribution of 1.45 sen per unit, with ex-date on Nov 9.

Going forward, executive director Datuk Eric Ong Kook Liong said the REIT's core strategy will be to continue to pursue high quality accretive acquisitions to support sustainable distribution payout to unitholders.

"We remain cautiously optimistic of our prospects in line with the economic recovery as market uncertainties continue to loom.

"We are also cognisant of the challenges that lie ahead such as rising interest rates and inflationary pressures. However, we will continue to actively monitor the situation and take proactive measures to sustain our business performance moving forward," he said.

KIP earlier this month obtained unitholders' approval for the acquisition of three industrial assets in Port Klang for RM78.7 million from agrochemicals company Hextar Global Bhd and its major shareholder Datuk Eddie Ong Choo Meng, who also owns a 21.7% stake in the REIT.

"This marks KIP REIT's maiden acquisition of industrial properties as an asset class, which is part of our diversification plans. That said, we remain committed to focusing on our core strengths in the management of KIP REIT's retail assets," said Kook Liong.

Upon completion of the acquisition, the properties will be leased to the Hextar group of companies for a period of 15 years.

Units of KIP, which climbed 14% year-to-date, closed unchanged at 89.5 sen per unit on Wednesday, giving it a market capitalisation of RM518.16 million.