Tag: Hektar Real Estate Investment Trust (Hektar REIT)

• NPI Goes up by 77% & Realised Net Income Increased by 862% in 3Q 2022
• For 3Q 2022, Revenue recorded a substantial increase of 62%
• For YTD September 2022, NPI goes up by 40% and Realised Net Income by 256%
• Earnings supported by a continued recovery in the retail sector

Hektar Asset Management Sdn. Bhd., the Manager of Hektar Real Estate Investment Trust (Hektar REIT), today announced the third quarter results ended 30 September 2022 (3Q 2022). Hektar REIT recorded revenue of RM31.06 million, a substantial increase of 62.4% compared with RM19.12 million in the same quarter of the previous year. The higher revenue is attributed to the increased rental income, including higher turnover rent, increased car park income and higher hotel occupancy. Hektar REIT registered a net property income of RM18.31 million, an increase of 77.2% compared with RM10.33 million in 3Q 2021, while the realised net income was RM13.50 million, a notable increase of 861.8% compared with RM1.40 million for the same quarter in the preceding year.

Hektar REIT’s performance for the nine months ended 30 September 2022 (9M 2022) showed an increase in revenue by 25% to RM89.55 million compared with RM71.62 million in the corresponding period of 2021. The net property income rose 40.4% to RM48.64 million in 9M 2022 compared with RM34.63 million in the same period for last year, while the realised net income grew by 256% to RM33.82 million compared with RM9.50 million.

The Malaysian retail landscape showed steady recovery as it inches back to the pre-pandemic levels, and it is evident across Hektar REIT’s portfolio. The shopping malls recorded a higher footfall of 269% year-on-year (y-o-y), along with a 152% higher vehicle count y-o-y. This is in tandem with the continuous improvement in tenants’ sales performance at our malls, providing headroom for rental growth.

En. Johari Shukri bin Jamil, Chief Executive Officer of Hektar Asset Management Sdn. Bhd. said: “Retail activities remained strong in the quarter under review. Recovery in consumer-related subsectors, including leisure, international tourism and hospitality, continued to aid in the overall performance of the retail industry. Hektar REIT’s malls are well-positioned as neighbourhood malls and leverage the proximity to the community, catering to all their basic needs as well as an increased desire for F&B and social offerings such as entertainment options to be enjoyed together with their family & friends.”

“Despite the Malaysian economy’s strong performance, we remain cautious of the outlook for the coming quarters given the volatile economic landscape driven by hawkish monetary policy in response to inflationary pressure, uncertain consumer sentiments as well as lingering supply-chain and logistics issues stemming from geopolitical concerns. We will continue adopting prudent financial management, cost optimisation and enhancing our asset efficiencies to help cushion the impact.”

“We are also actively exploring avenues for growth by ensuring a strong portfolio of retail brands in our malls that can optimise sustainable returns and defensible income through active tenancy remixing and rejuvenation of the centres. We will continue to look for ways to enhance and improve the look and condition of our malls as part of longer-term strategies to improve our dividend yields. To improve on revenue and debt recovery post-pandemic, our team has been consistently tracking tenants’ ongoing performance to carefully structure our new tenancies and renewals, apart from aggressively looking at strategies to manage rental collection. We also remain committed to reducing our environmental footprint and increasing our responsibility towards our stakeholders by continuously undertaking several ESG initiatives because it is the right thing to do for ourselves and our communities.”

Hektar REIT: http://www.hektarreit.com/

NPI Goes up by 34% in 2Q 2022 & Realised Net Income Increased by 151% for 1H 2022

• For 2Q 2022 Revenue is higher by 14% and Realised Net Income goes up by 317%
• Occupancy rate remains stable at 84.8%
• Interim income distribution of 2.70 sen declared
• Awarded “Company of the Year for Stakeholder & Community Engagement”
• ESG Disclosures & Sustainability Initiatives remain our key focus areas
  

Hektar Asset Management Sdn. Bhd., the Manager of Hektar Real Estate Investment Trust (Hektar REIT), today announced the second quarter results ended 30 June 2022 (2Q 2022). Hektar REIT recorded revenue of RM29.37 million, an increase of 14.2% compared to the RM25.71 million recorded in the corresponding quarter of the previous year. The higher revenue is attributed to increased rental & car park income and higher hotel occupancy. Hektar REIT registered a net property income of RM13.70 million, an increase of 34.3% compared to RM10.20 million in 2Q 2021, while the realised net income was RM6.57 million, a substantial increase of 317.3% compared to the same period in the preceding year.

Earnings per unit rose significantly by 311.8% to 1.40 sen for 2Q 2022 compared with the same quarter in the previous year. Based on the financial performance for the current quarter, Hektar REIT has declared an interim income distribution of 2.70 sen per unit, amounting to RM12.72 million, to be made on 26 September 2022.

Hektar REIT’s performance for the six months ended 30 June 2022 (1H 2022) showed an increase in revenue by 11.4% to RM58.49 million compared with RM52.49 million registered in the corresponding period of the previous year. The net property income of RM30.33 million exhibited an increase of 24.8% compared with RM24.30 million in 1H 2021, while the realised net income grew by 151.0% to RM20.32 million compared with RM8.10 million recorded in 1H 2021.

After two straight years of the Covid-19 pandemic, the retail landscape is currently going through normalization & early phases of recovery. The portfolio of malls under Hektar REIT has experienced a 58% year-on-year (y-o-y) increase in visitor footfall and a 50% higher vehicle count y-o-y. This is in tandem with the huge improvement in the tenant sales performance at our malls. Despite the improved performance, the Manager has adopted a cautious outlook for the coming quarters in light of inflationary pressure and uncertain global economic outlook that may affect domestic economic activities. As part of our business sustainability measures to ensure that our malls have stable occupancy, we will continue to monitor and review our rental strategy.

En. Johari Shukri bin Jamil, Chief Executive Officer of Hektar Asset Management Sdn. Bhd. said: “As part of our sustainable business strategy, we will continue adopting prudent financial management, cost optimization initiatives, and enhancing our asset efficiencies to help cushion the impact of increasing interest rates and rising cost of inflation. Furthermore, we continue to increase our engagement with all stakeholders, including tenants, to offer them competitive rental rates to facilitate their recovery.”

“At the same time, for our shoppers and loyal patrons, we are continuously working on enhancing our existing facilities at our shopping malls to provide a great retail experience. For our valued unitholders, we remain committed to distributing at least 90% of Hektar REIT’s realised net income for the financial year ending 31 December 2022.”

“Hektar REIT’s Assets Under Management (AUM) comprises five established neighbourhood-focused malls and one regional shopping mall, which play a key role in serving as a community hub. Recently, Hektar REIT’s Sustainability and CSR initiatives have been recognised and awarded with Company of the Year for Stakeholder & Community Engagement at the Sustainability & CSR Malaysia 2022 Awards. We are humbled to receive this award and will continue to play our role towards the betterment of our communities.”

“Similarly, our efforts towards Environment, Social & Governance (ESG) have been recognised and rewarded by the FTSE4Good Bursa Malaysia Index by FTSE Russell to an upgrade of 4-star rating in the latest June 2022 evaluation. These acknowledgements further affirmed our commitment to reducing our environmental footprint, enhancing our corporate governance, and increasing our responsibility towards our stakeholders.”

Hektar REIT: http://www.hektarreit.com/

• Revenue grew by 8.7%, while EPU increased by 106.6%
• Gradual recovery is expected as the country transitions towards endemicity
• Occupancy rate remains steady at 84.8%
• Sustainability Initiatives remain our top priority

Hektar Asset Management Sdn. Bhd., the Manager of Hektar Real Estate Investment Trust (Hektar REIT), today announced the first quarter results ended 31 March 2022 (1Q 2022). Hektar REIT recorded revenue of RM29.11 million, an increase of 8.7% compared to the RM26.78 million recorded in the corresponding quarter of the previous year. The higher revenue is attributed to the increase in rental income, car park income and higher hotel occupancy, consistent with other retail and hospitality REITs. The overall retail sentiment for this quarter remained positive as it was supported by the increase in retail sales due to the pent-up demand from last quarter. Hektar REIT’s net property income increased 17.9% to RM16.62 million compared with RM14.09 million recorded in 1Q 2021, while realised income for the quarter under review gained 110.7% to RM13.74 million compared with RM5.52 million in 1Q 2021. Earnings per unit rose by 106.6% to 2.92 sen for 1Q 2022 compared with 1.41 sen for 1Q 2021.

Despite the dynamic & challenging environment, the Manager was able to bring in new tenants and secure the existing tenancies. Hektar REIT’s overall portfolio occupancy rate has remained steady at 84.8% in the quarter under review. Anchor support for Hektar’s malls remains positive as Golden Screen Cinemas (GSC) , our anchor tenant at Subang Parade, Central Square and Kulim Central, has started operating their business. The commitment by such an anchor tenant is a testament to the confidence in the long-term prospects of the malls. Hektar REIT is cautiously optimistic that there will be a gradual recovery as the country transitions into an endemic phase with the lifting of restrictions and reopening of the international borders.

Retail Group Malaysia (RGM) also expects the retail industry to recover in 2022 after posting a 26.5% growth rate year-on-year in 4Q 2021, which was above market expectations. RGM anticipates retail sales to grow by 6.3% in 2022. The Manager will maintain a cautious outlook for the coming quarters & continue monitoring the evolving situation and remain focused on ensuring the safety & well-being of our shoppers, tenants, employees and communities at all its properties.

Due to the prolonged COVID-19 pandemic & implementation of lockdowns in 2020 and 2021, the retailers are still in the early stages of recovery. Therefore, despite the improved performance of Hektar REIT, the Manager has decided to adopt a prudent approach by moving from quarterly to semi-annual income distribution as part of its long-term strategy to enhance the REIT’s capital management. Moving forward, subject to the financial performance of the REIT, the Manager intends to make distributions to the unitholders of Hektar REIT on a semi-annual basis for each six-month period ending 30 June and 31 December each year, unless otherwise determined and/or varied by the Manager at its sole discretion. However, the Manager remains committed to distribute at least 90% of Hektar REIT’s distributable income for the financial year ending 31 December 2022.

Hektar REIT remains committed to fulfill its obligation to ensure that business activities are performed to high standards of Environmental, Social and Governance (ESG). Various energy utilisation and optimisation initiatives since 2017 have been put in place for all of its shopping malls, resulting in a significant reduction in greenhouse gas emissions (recorded as CO2e) and energy usage over the last five years. Despite the pandemic, reducing the environmental footprint of our assets and operations remain a top priority. Our Waste Management initiatives have helped to reduce Waste Disposal by 156 tonnes or 22% compared to the same quarter in the preceding year. Hektar REIT is a constituent member of the FTSE4Good Bursa Malaysia Index and in its latest December 2021 evaluation, its ESG conduct has been recognised with a 3-star ESG rating by FTSE Russell.

Hektar REIT: http://www.hektarreit.com/

• Achieved Revenue of RM96.6 million & Net Property Income of RM47 million
  
• DPU of 2.53 sen, up 181%
  
• Signs of recovery weighed by Omicron surge
  
• Stepping up on sustainability measures & 3-star ESG rating by FTSE Russell

Hektar Asset Management Sdn. Bhd., the Manager of Hektar Real Estate Investment Trust (Hektar REIT), today announced Hektar REIT’s annual results for the financial year ended 31 December 2021 (FY2021) with revenue at RM96.60 million in FY2021, down by 13.1% compared to the same period in the preceding year. Property Operating Expenses reduced by RM8.59 million or savings of 14.8% compared to the previous year. Net Property Income (NPI) was reported at RM47.02 million, a decline of 11.2% compared with 2020. FY21 was a challenging year for the retail sector due to the COVID-19 pandemic and implementation of various Movement Control Orders, National Recovery Plan, mobility restrictions & closure of non-essential businesses for an extended period. Despite these challenges to the malls, the REIT managed to attract new & secured existing tenants covering 39.2% of Hektar REIT’s Net Lettable Area (NLA) in FY21.

For the fourth quarter ended 31 December 2021 (“4Q 2021”), Hektar REIT recorded revenue of RM24.98 million, which is 16.2% lower compared to the same quarter of the preceding year. Property Operating Expenses reduced by RM4.86 million or savings of 27.9% compared to the same quarter in the previous year. Hektar REIT registered net property income of RM12.38 million for the quarter under review, which is a slight increase of 0.2% compared to the corresponding quarter of the previous year, while realised income for 4Q 2021 was 185.5% higher at RM3.21 million compared to the RM1.12 million recorded in 4Q 2020.

The Manager noted that there are signs of recovery supported by the gradual reopening of the economy and it can also be seen in the steady rise in visitor footfall since the relaxation of restrictions by the Government. While Hektar REIT is cognisant of the economy’s improved growth trajectory supported by a recovering labour market, continued policy support and expansion in external demand, as well as the possible opening of international borders as early as the second quarter, the REIT is nevertheless retaining its cautious outlook in the face of the current wave of infections stemming from the Omicron strain.

Income Distribution
As earlier announced, Hektar REIT declared an income distribution of RM11.9 million for 4Q 2021, equivalent to 2.53 sen per unit or a DPU yield of 4.96%, which is 181% higher compared to the income distribution for the corresponding period in 2020. The COVID-19 pandemic has impacted the retail industry significantly and the REIT has also not been spared. However, we remain committed to steering our portfolio into recovery this year, barring any unforeseen circumstances despite future Variants of Concern (“VOC”) that might disrupt the overall recovery of the retail & economic sector.

Private Placement
During the quarter under review, Hektar REIT’s fund size increased to 471,260,178 units from 461,960,178 units arising from the private placement exercise announced on 15 November 2021. A total of 9.30 million units out of the total proposed private placement of 23.098 million units were subsequently placed out in two tranches in December 2021, raising RM4.23 million. The private placement was undertaken to raise funding for working capital and capital work in progress, facilitating Hektar REIT’s day-to-day operations as a whole by providing more flexibility in terms of cash flow management.

Sustainability Efforts
Hektar REIT remains committed to fulfill its obligation to ensure that all business activities are performed to high standards of Environmental, Social and Governance (ESG). Various energy utilisation and optimisation initiatives since 2017 have been put in place for all of its shopping malls, resulting in a significant reduction in greenhouse gas emissions (recorded as CO2e) and energy usage over the last five years. Despite the pandemic, reducing the environmental footprint of our assets and operations remain a priority. We managed to reduce the overall amount of CO2e emissions of our assets by about 11.6% to 18.8 million kgCO2e in 2021 from almost 21.3 million kgCO2e in 2020. Emissions intensity of our assets expressed as the amount of CO2e emitted per gross floor area (kgCO2e/sq.ft.) also improved to 4.0 kgCO2e/sq.ft. from 4.50 kgCO2e/sq.ft. in 2020. Overall, the portfolio’s Building Energy Intensity (“BEI”) is also on a declining trend. Hektar REIT is a constituent member of the FTSE4Good Bursa Malaysia Index and in its latest December 2021 evaluation, its ESG conduct has been recognised with a 3-star ESG rating by FTSE Russell.

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