Sentral REIT's 2Q net property income up 4.55%

• In a filing to Bursa Malaysia on Thursday (Aug 10), the group reported that property operating expenses for the second quarter of 2023 (2Q2023) were RM9 million, marking a 4.8% increase from 2Q2022, due to higher utilities expenses for certain properties within the portfolio

KUALA LUMPUR (Aug 10): Sentral REIT's net property income for the second quarter ended June 30, 2023 (2QFY2023) grew 4.55% to RM29.21 million from RM27.94 million a year earlier.

In a filing to Bursa Malaysia on Thursday (Aug 10), the group reported that property operating expenses for the second quarter of 2023 (2Q2023) were RM9 million, marking a 4.8% increase from 2Q2022, due to higher utilities expenses for certain properties within the portfolio

The group also noted that despite a higher net property income contribution, the quarter experienced lower realised income primarily due to elevated finance costs and utilities expenses.

Quarterly revenue was up by 4.59% to RM38.19 million from RM36.51 million a year earlier, driven by higher revenue generated from Menara Shell and Platinum Sentral, partially offset by the decrease in revenue from Wisma Technip and QB2.

The real estate investment trust (REIT) declared an interim income distribution of 3.19 sen per unit, which will be paid on Sept 18, translating into a yield of 7.83% based on the group’s closing price of 81.5 sen on June 30, 2023.

For the first half of 2023, the company recorded net property income of RM58.49 million against RM58.45 million a year prior, while revenue for the same period stood at RM75.67 million from RM75.27 million.

Approximately 74,000 sq ft or 98% of the group's committed net lettable area (NLA) due in 1H2023 were successfully renewed.

Correspondingly, Sentral REIT also recorded a portfolio occupancy rate of 77% in 2Q2023, similar to the portfolio occupancy recorded in the previous quarter.

On prospects, Sentral REIT said the Klang Valley office and retail markets are expected to remain challenging.

“Sentral will continue to focus on asset management and leasing strategies that are centred on cost optimisation and tenant retention in the current operating environment,” it said.

Sentral REIT said efforts will be intensified to market the available office spaces under the portfolio with a focus on bringing in new tenants from the IT, e-commerce, serviced office and shared services sectors.

Sentral REIT units traded unchanged at 84.5 sen, valuing it at some RM905 million.

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