Hektar Asset Management Sdn. Bhd., the Manager of Hektar Real Estate Investment Trust (“Hektar REIT”) is pleased to announce the second quarter results for the financial year ending 30 June 2024 (“Q2 FY2024”), highlighting a significant improvement in financial performance driven by new revenue contribution from Kolej Yayasan Saad and effective operational management.
Sabrina Halim, Chief Operating Officer of Hektar Asset Management In Q2 FY2024, Hektar REIT reported revenue of RM36.6 million, an increase of 34.4% compared to RM27.2 million in the preceding year’s corresponding quarter (“Q2 FY2023”) largely attributed to the rental income recognised from its newly acquired education asset, Kolej Yayasan Saad (“KYS”). Net Property Income (“NPI”) increased by 33.7% from RM15.5 million to RM20.7 million, and Net Realised Income surged by 42.8% to RM9.9 million in Q2 FY2024.
Hektar REITSummary of Financial Results for 2Q24Q2’ 2024RM’000Q2’ 2023RM’000Variance%Total Revenue36,55727,20734.4Nei Property Income (“NPI”)20,71315,42733.7Net Realised Income9,9336,95642.8
The quarter under review saw an encouraging rental reversion rate across all Hektar Malls with overall rental reversion recorded at 6.4%. On its tenancy expiry profile, a total of 28 renewals and new tenancies were secured which make up to 3.2% of the portfolio’s net lettable area. Cumulatively, a total of 62 renewals and new tenancies representing 259,676 sf of 12.7% of its retail portfolio’s net lettable area have been completed to-date with other expiring tenancies are currently in advanced negotiations stage, on track for conclusion by year-end.Supported by the strong financial performance, the Manager of Hektar REIT has declared an interim income distribution of 1.9 sen per unit for Q2 FY2024, totalling RM13.4 million. This translates to an annualised dividend yield of 6.4% based on the closing price of RM0.595 on 28 June 2024. The Income Distribution Reinvestment Plan (“IDRP”) will be applied, allowing unitholders to reinvest their dividends into new units. Unitholders are presented with this option to enhance their investments in Hektar REIT, in alignment to Hektar REIT’s capital growth and preservation objectives.As at Q2 FY2024, the overall occupancy rate at Hektar Malls was recorded at 87.2%. On the other hand, secured occupancy rate has further improved to 89.3% with tenants committed to open their doors to customers in the coming quarters. The encouraging numbers resulted from Hektar REIT’s enhance leasing strategies, continuous Asset Enhancement Initiatives (“AEI”) together with the strong retail industry outlook for the remaining half of 2024.To further extract values from its portfolio of retail assets, the Manager’s focus remains to be on Subang Parade’s overall repositioning. Urban Agenda Design Sdn Bhd was recently appointed as the lead architect for the rejuvenation project which covers Subang Parade’s interior and exterior facelifts to be implemented over three (3) years. Urban Agenda Design Sdn Bhd is an experienced party with extensive redevelopment portfolio ranging from REX KL, Semua House, The Five and Maximin Office (PJ). The management foresees improved occupancy levels, positive rental reversions, property valuation and increase in visitor traffic post-renovation works. The project is currently at the detailed design stage with the actual works on-site targeted to commence by Q1 2025.Sabrina Halim, Chief Operating Officer of Hektar Asset Management Sdn. Bhd. commented, “The positive results derived from the successful acquisition of our first non-retail asset marks a significant milestone in our diversification strategy. This strategic move not only broadens our portfolio but also enhances our resilience against market fluctuations. We believe that diversifying our asset base with high-quality, income-generating properties will provide a more stable revenue stream and reduce our dependency on retail assets alone.”She further added, “As we move forward, we are actively exploring further accretive opportunities that align with our long-term growth objectives, ensuring that we continue to deliver sustainable and attractive returns to our unitholders. Our commitment to optimising our asset portfolio and implementing prudent capital management practices will drive Hektar REIT’s growth and position us strongly in an increasingly competitive market environment.”The Manager recently announced the intention to double Hektar REIT’s portfolio size to RM3 billion by 2027. Presented by various opportunities, the Manager is carefully appraising the prospects for their financial feasibility, strength of income stream, growth potential and contribution to the portfolio’s blended returns. With a target of having a well-balanced portfolio, the Manager is focusing on its core which is underserved retail assets with value creation potential, while also eyeing for resilient assets such as education properties within the K-12 segment and light industrial properties. Meanwhile, the Manager is continuously enhancing the leasing and marketing initiatives at Hektar Malls, with pockets of minor AEIs implemented on-site to further enhance the value propositions of the shopping centres.ABOUT HEKTAR REAL ESTATE INVESTMENT TRUSTHektar Real Estate Investment Trust (“Hektar REIT”) is Malaysia’s first listed retail-focused REIT. The primary objectives of Hektar REIT are to provide unitholders with sustainable dividend income and to achieve a long-term capital appreciation of the REIT. Hektar REIT was listed on the Main Market of Bursa Malaysia Securities Berhad on 4 December 2006 and currently owns 2 million square feet of retail space in 4 states with assets valued at RM1.2 billion as at 31 December 2023. Hektar REIT is managed by Hektar Asset Management Sdn Bhd and the property manager is Hektar Property Services Sdn Bhd. Hektar REIT’s portfolio of diversified properties includes Subang Parade in Subang Jaya, Selangor; Mahkota Parade and Kolej Yayasan Saad in Melaka; Wetex Parade & Classic Hotel in Muar, Johor; Central Square in Sungai Petani, Kedah; Kulim Central in Kulim, Kedah and Segamat Central in Segamat, Johor. For more information, please visit www.HektarREIT.comFor more information or inquiries, please contact:
Hektar Asset Management Sdn BhdD1-U3-10, Solaris DutamasNo 1, Jalan Dutamas 150480 Kuala LumpurMalaysia Investor RelationsTel: +603 6205 5570Fax: +603 6205 5571Email: ir@HektarREIT.comWeb: www.HektarREIT.com
“Sustainable Company of the Year”, highlighting Hektar REIT’s excellence in sustainable practices and community engagement
“Leadership Excellence in REIT Management”, recognising domestic top achievers and their contributions towards Malaysian economy
Hektar Asset Management Sdn Bhd (Hektar Asset Management), the Manager for Hektar Real Estate Investment Trust (Hektar REIT) is pleased to announce that the Company is a proud recipient of two Awards at the esteemed Malaysia Top Achievers 2023 (MATA 2023), Sustainable Company of the Year Award to Hektar REIT, and Leadership Excellence in REIT Management Award to Executive Director and Chief Executive Officer Johari Shukri Jamil.
From Left: Dato’ Sohaimi Shahadan, Deputy President, ASEAN Chamber of Commerce Inc.; Dato’ Sri Ismail Sabri Yaakob, Former Prime Minister of Malaysia; Johari Shukri Jamil, ED & CEO of Hektar Asset Management; and Hema Kandy, CEO, My Events International (Link)
From Left: Mohamad Othman Mail, Senior Manager, Finance; Lim Kek Siang, Senior General Manager, Finance; Johari Shukri Jamil, ED & CEO of & spouse; Martin Chen, General Manager, Legal; and Muhammad Fahmi Rasni, Senior Manager, Business Strategy of Hektar Asset Management (Link)
En. Johari Shukri Jamil, Executive Director & CEO of Hektar Asset Management said, “We are truly humbled and honoured to receive both the Sustainable Company of the Year award and Leadership Excellence in REIT Management award from MATA 2023. We owe the recognitions to our incredible team, whose commitment and tireless dedication led us to these awards. It reaffirms our dedication to integrating sustainability into every aspect of our operations.”
He further added, “The conferment of the Sustainable Company of the Year award to Hektar REIT is a testament to the REIT’s industry-leading initiatives and its steadfast commitment to sustainability and community support. This prestigious recognition is expected to further solidify Hektar REIT’s reputation as a socially responsible entity and a key player in Malaysia’s journey towards sustainable development.
“At Hektar REIT, we believe in the power of responsible business practices to create shared value for all our stakeholders, from our tenants and employees to our shareholders and the communities we serve. Today’s awards serve as both an honour and a motivation for our team to continue pushing the boundaries in sustainability and corporate social responsibility. We remain committed to our vision of not only achieving business growth but also making a positive impact on society and the environment.”
A joint venture between The Leaders Online and My Events International, the MATA 2023 celebrates the commendable achievements of local businesses and individuals who have showcased excellence and exceptional performance across various sectors.
This year’s event places a strong emphasis in promoting home-grown talents and inspiring local enterprises to achieve international recognition through their outstanding products and services in 28 categories. Some of the distinctive awards of the night included Icon of The Year, Masterclass Woman Achiever of The Year and Entrepreneur of The Year.
Hektar REIT partners with the University of Reading Malaysia as part of its ESG initiatives
Collaboration involves student bursaries, sponsorships, internship programs & career opportunities
Hektar Asset Management Sdn. Bhd., the Manager of Hektar Real Estate Investment Trust (Hektar REIT) is delighted to announce a collaboration with the University of Reading Malaysia. In a strategic move underscoring Hektar REIT’s commitment to community development, a memorandum of understanding (MOU) has been signed with the University of Reading Malaysia, specifically targeting students from the Henley Business School. This collaboration emphasizes Hektar REIT’s recognition of education as a foundation for building stronger communities.
Sabrina Halim, General Manager, Business Development & Strategy and Johari Shukri bin Jamil, Executive Director & Chief Executive Officer of Hektar Asset Management Sdn. Bhd.; Professor Wing Lam, Provost and CEO of University of Reading Malaysia, and Professor Teck Yong Eng, Professor of Business Enterprise & Analytics, Head of Henley Business School Malaysia[L-R]
This partnership aligns with Hektar REIT’s dedication to supporting educational endeavours and fostering a well-rounded talent pool essential for societal progress and industry readiness. The initiative encompasses various forms of support for students, such as bursaries, cash rewards for high-achieving individuals, as well as opportunities for internships and placements. Through these efforts, Hektar REIT aims to make a positive impact by fostering the growth of the next generation of professionals and leaders.
ED & CEO of Hektar Asset Management Sdn Bhd
Hektar REIT plans to offer practical opportunities for students through internship programs, allowing them to gain valuable hands-on experience. This is in line with Hektar REIT’s goal to bridge academic learning with real-world applications, ensuring students are well-prepared for their future careers. Additionally, Hektar REIT is looking forward to introducing Graduate Trainee Programs at a later stage, further enriching the students’ professional development.
En. Johari Shukri bin Jamil, Executive Director & Chief Executive Officer of Hektar Asset Management Sdn. Bhd. expressed his views on this initiative, “We are excited about this collaboration with the University of Reading Malaysia. Our collaboration exemplifies our commitment to ESG values. By harmonizing business operations with sustainability, we aim to set a precedent for responsible corporate practices that benefit both our stakeholders and society at large. It is indeed an opportunity for us to contribute to the growth and development of young minds. This aligns perfectly with our goal to achieve business success and play a role in nurturing future talent and giving back to the community. Through education and practical learning experiences, we believe we can make a positive impact on society. Together, we aspire to cultivate a generation of responsible professionals and contribute to the betterment of society.”
This collaborative effort is part of Hektar REIT’s broader strategy to integrate business operations with sustainable and socially responsible practices. Hektar REIT stands at the forefront of a paradigm shift, recognizing the imperative to integrate ESG principles into the core of its operations. This collaboration with the University of Reading Malaysia serves as a testament to Hektar REIT’s proactive approach to balancing business objectives with a genuine commitment to societal welfare.
Robust Leasing Initiatives Boost Portfolio Occupancy Rate to 87.7% – Revenue recorded at RM27.8 million and NPI of RM15.4 million – Diversification Strategy: Pioneering Beyond Retail – Proposed Acquisition of KYSM, a leading private school in Melaka – Honoured with two Gold Awards at The Edge Malaysia ESG Awards 2023 – Positive Rental Reversions continue to lead to improvement
Hektar Asset Management Sdn. Bhd., the Manager of Hektar Real Estate Investment Trust (Hektar REIT), today reported a resilient financial performance for the third quarter ended 30 September 2023 (Q3 2023). The REIT showcased a sustained commitment to financial stability and strategic growth in a challenging economic environment. In Q3 2023, Hektar REIT achieved a total revenue of RM27.8 million and an NPI of RM15.4 million. The Net Property Income (NPI) margin stood strong at 55.4%. These figures reflect the REIT’s adept handling of market volatilities and its dedication to operational efficiency.
En. Johari Shukri Jamil, Executive Director & Chief Executive Officer of Hektar Asset Management Sdn. Bhd.
In addressing the challenges posed by increasing operational costs during Q3 2023, the Manager actively reinforces the REIT’s financial standing and amplifies profitability through sound capital management initiatives by demonstrating fiscal prudence. The REIT has successfully reduced its gearing ratio to 44.3% in the current quarter, down from 44.6% as of 31 December 2022, via a targeted debt reduction program.
Furthermore, the Manager continues to embrace an assertive and strategic leasing approach. The REIT has elevated the overall occupancy rate of its retail asset portfolio to 87.7% during the third quarter of 2023. Three of the malls under the portfolio, Mahkota Parade & Wetex Parade, recorded an occupancy rate of more than 93% and Kulim Central recorded close to 98%. Overall, rental reversions for the quarter were positive. These proactive measures are poised to enhance the tenancy mix, positioning the REIT for anticipated revenue growth in the upcoming quarters.
In a landmark move announced in September 2023, Hektar REIT has broadened its investment horizon with the proposed strategic acquisition of Kolej Yayasan Saad Melaka (KYSM), a renowned private boarding school located in Ayer Keroh, Melaka. This proposed acquisition, which is valued at RM150 million marks a significant pivot towards educational assets, diversifying Hektar REIT’s portfolio beyond its traditional retail focus. KYSM, established in June 1995, stands out as a top-tier institution, consistently ranked among the best for Sijil Pelajaran Malaysia (SPM) results.
The proposed acquisition of KYSM is not just a diversification move but also a strategic investment providing a sustainable and resilient income source. With a 30-year Quadruple-Net lease agreement that includes a guaranteed step-up yearly return, this investment promises a steady and potentially growing income stream for Hektar REIT. This acquisition is strategically financed through a balanced mix of Proposed Placements, internally generated funds, and borrowings. This approach ensures that the REIT maintains a healthy gearing ratio, preserving financial flexibility and stability while embarking on this significant expansion.
Hektar REIT’s commitment to Environmental, Social, and Governance (ESG) practices has again been prominently recognized in the industry. The organization’s conscientious approach to sustainability and corporate responsibility culminated in Hektar REIT receiving two Gold Awards at The Edge Malaysia ESG Awards 2023. These prestigious awards were for Outstanding ESG & Dividend Return Award and the Real Estate Investment Trust (REIT) Award.
This is a testament to Hektar REIT’s leadership in integrating ESG principles into its business model. The Awards were in collaboration with Bursa Malaysia, FTSE Russell & Morningstar and were designed to highlight and celebrate companies that exemplify outstanding ESG practices. Hektar REIT’s success in these categories demonstrates its effective integration of ESG considerations in its operational and strategic decisions. The recognition reflects the company’s dedication to creating sustainable value for stakeholders while contributing positively to environmental stewardship, social responsibility and ethical governance.
En. Johari Shukri Jamil, Executive Director & Chief Executive Officer of Hektar Asset Management Sdn. Bhd. said: “Hektar REIT’s malls, strategically positioned as neighbourhood and community hubs, have been the focal point of our success. Our unwavering commitment to enhancing the overall tenancy mix and occupancy levels at our malls reflects our dedication to our niche market.
This strategic move involves remixing tenancies by introducing new, vibrant tenants to complement our existing offerings. We are confident that this initiative will not only meet but exceed the expectations of our loyal patrons. Our primary focus remains on implementing targeted strategies to improve visitor footfall and create a sustained positive cycle for our malls and retailers. Our overall committed occupancy currently stands at 88.4%, and we are positive we will surpass the 90% mark by the end of this year. We believe in initiatives yielding long-term benefits and ensuring continuous growth, ultimately delivering sustainable returns to our Unitholders.”
Senior Manager, Business Strategy Muhammad Fahmi bin Rasni; Senior Manager, Finance, Mohamad Othman bin Mail; GM, Legal, Martin Chen Kuok Yeow; GM, Business Development & Strategy, Nor Sabrina binti Halim; ED & CEO, Johari Shukri bin Jamil; Senior GM, Finance, Lim Kek Siang; Assistant Manager, Investor Relations, ESG & Special Projects, Muhammad Bakhtiar Ul Haq; and Manager, Risk & Assurance, Aida binti Zainudin of Hektar REIT[L-R]
Hektar REIT was announced as one of this event’s biggest winners in the equities category. These awards serve as a testament to Hektar REIT’s steadfast dedication to maintaining the highest levels of excellence in Environmental, Social, and Governance (ESG) practices. The distinguished award ceremony took place during a grand gala dinner at the Hilton, Kuala Lumpur, on 6 November 2023 and was officiated by Minister of Natural Resources, Environment, and Climate Change Nik Nazmi Nik Ahmad.
The Edge Malaysia ESG Awards 2023, a prestigious accolade in the industry, is divided into two distinct categories: the Equity Awards and the Fund Awards. Its primary aim is to recognize and laud the exemplary performance of Malaysia’s leaders in ESG excellence.
Under the Equity category, The Edge Malaysia collaborates closely with Bursa Malaysia and FTSE Russell. The objective is to spotlight and celebrate the best-performing PLCs, with the evaluation process grounded on the robust methodology provided by FTSE Russell. The Fund category sees The Edge Malaysia partnering with Morningstar to identify and reward the top-performing asset management firms using the latter’s recognized method. These awards were aimed at promoting ESG adoption and leadership amongst industry leaders and professionals by recognizing their contributions and successes.
Hektar REIT qualified under the category of Equity Awards, whereby a company must be listed on Bursa Malaysia and be a constituent of the FTSE Bursa Malaysia EMAS Index as of June 2023. Another key criterion for eligibility was for the companies to be assessed by FTSE Russell in December 2022 and June 2023. The Outstanding ESG and Dividend Return was a new category introduced by The Edge and companies were evaluated based on their performance for the last five years.
Johari Shukri Jamil, Executive Director & Chief Executive Officer of Hektar Asset Management Sdn. Bhd. said, “We are filled with gratitude and enthusiasm for securing these two prestigious Gold Awards, a significant milestone in Hektar REIT’s exceptional journey. It is a resounding affirmation of our unwavering dedication to weaving ESG principles into every facet of our operations and strategic vision, reinforcing our commitment to sustainability and the creation of long-lasting stakeholder value. At Hektar REIT, we firmly believe that our steadfast embrace of robust ESG practices forms the basis upon which we construct sustainable value for our esteemed unitholders, devoted shoppers, and the communities we are privileged to serve.
The significance of these two gold awards cannot be overstated; they symbolize the historical milestone we have achieved and propel us further towards continuing our sustainability mission. As we move forward, we remain deeply committed to not only maintaining but surpassing the high standards that have earned us these accolades. We understand that this success comes with a weighty responsibility, and we embrace it with enthusiasm, passion, and the utmost dedication.
Our journey is far from over; it has only just begun. With these two gold awards as our guiding stars, we are determined to explore new horizons and demonstrate that adopting a sustainable approach is not merely an option but a definitive path towards a more promising future for everyone.”
Hektar REIT remains committed to integrating ESG into all aspects of the business, from financial management to operations and future planning. This dedication is a cornerstone of our mission to deliver robust and enduring value to our stakeholders, positioning us for a prosperous future.
“Company of the Year – Best in Sustainability Reporting & Community Support” at the Sustainability & CSR Malaysia Awards 2023
Hektar Asset Management Sdn Bhd, the Manager for Hektar Real Estate Investment Trust (Hektar REIT) has been awarded “Company of the Year – Best in Sustainability Reporting & Community Support” under the category of Retail Management at the Sustainability & CSR Malaysia Awards 2023 held last night at Mandarin Oriental Hotel, Kuala Lumpur.
1. Mr. Muhammad Bakhtiar Ul Haq (Asst Manager, Investor Relations, ESG & Special Projects); 2. Pn. Sabrina Halim (General Manager, Business Development & Strategy); 3. Pn. Zarina Halim, (Chief Corporate Officer); 4. Mr. Lim Kek Siang (Senior General Manager, Finance); 5. Mr. Muhammad Fahmi Bin Rasni (Senior Manager, Business Development & Strategy) [L-R]
The Sustainability & CSR Malaysia Awards 2023, which was officiated by the Minister of Women, Family & Community Development, YB Dato’ Sri Hajah Nancy Shukri, is organised by CSR Malaysia, a publication and social initiative under the auspices of the Malaysian Welfare Society for Corporate Sustainability & Responsibility, which is the national organisation for sustainability in the country. Several nominations were received for the various categories, with awardees judged by a distinguished panel of judges drawn from the media and the Malaysian Welfare Society for Corporate Sustainability & Responsibility.
Hektar REIT is proud to announce that it has been honoured with this highly acclaimed award for its unwavering dedication to Corporate Social Responsibility (CSR) and Sustainability practices. The recognition highlights Hektar REIT’s exceptional efforts in contributing towards the people and the environment. The company embraces its responsibility to create shared value for all stakeholders, including tenants, employees, shareholders and the surrounding communities. Through extensive CSR programs, Hektar REIT consistently engages in activities that have fostered strong partnerships with local communities and institutions to drive impactful social change. By investing in the community, Hektar REIT has continued to play a pivotal role in improving and enriching the lives of communities surrounding the areas at which our malls operate.
Executive Director & Chief Executive Officer of Hektar Asset Management Sdn. Bhd. (“Hektar Asset Management”), En. Johari Shukri Jamil said “As we navigate the changing landscapes of business, one thing remains clear: Our responsibility goes beyond quarterly profits and shareholder value. Sustainability and corporate social responsibility (CSR) are central to who we are and how we operate. We must view our work through the lens of sustainability, not as a separate initiative, but as an intrinsic element of all our decisions and actions. We are committed to a world where our CSR efforts are a reflection of our respect for the planet, our community, and future generations. We are committed to business growth, enhancing the value for our unitholders, and positively impacting the world around us.”
He said, “It is immensely gratifying to have these efforts recognised by the Sustainability & CSR Malaysia Awards. This serves as both an honour and an inspiration for us to keep pushing the boundaries of what we can achieve in the realms of sustainability and community support.”
The awards are a testament to Hektar REIT’s industry-leading initiatives and its unwavering commitment to sustainability and CSR. This recognition will further cement Hektar REIT’s reputation as a socially responsible company that is actively contributing to a more sustainable future.
Occupancy Rate Increased to 83.8% with Positive Rental Reversion – Revenue recorded of RM28.9 million and Net Property Income of RM15.2 million – Robust NPI Margin of 52% indicating healthy financial performance – Gearing ratio lowered to 44.3% due to effective financial strategy – Improvement in portfolio occupancy rate to 83.8% – Positive rental reversions
Hektar Asset Management Sdn. Bhd., the Manager of Hektar Real Estate Investment Trust (Hektar REIT), today announced that for the first quarter ended 31 March 2023 (1Q 2023), Hektar REIT registered revenue of RM28.9 million and the Net Property Income (NPI) for the quarter under review stood at RM15.2 million at the back of higher utilities cost driven by the electricity tariff hike due to the adjustments of the Imbalance Cost Pass-Through (ICPT) mechanism, and the increase in minimum wages. Realised Net Income for 1Q 2023 stood at RM9.2 million due to higher finance cost in line with the increase of Overnight Policy Rates (OPR) implemented by Bank Negara Malaysia.
En. Johari Shukri Bin Jamil, Chief Executive Officer of Hektar Asset Management Sdn Bhd
Hektar REIT recorded a robust NPI Margin of 52%, indicating a healthy financial performance throughout the Assets Under Management (AUM). The Gearing Ratio was improved to 44.3% due to prudent financial management.
Hektar REIT’s portfolio performance showed considerable improvement and the portfolio occupancy improved to 83.8%. Mahkota Parade & Wetex Parade occupancy rates improved tremendously, recording more than 90% and Kulim Central recorded close to 96%. The Management is also pleased to report a positive rental reversion for this quarter with 78 new or renewed tenancies consisting of 14.0% of the total Net Lettable Area (NLA), equivalent to 287,298 sq. ft. Despite the challenging retail environment, Management remains aggressive in boosting occupancies by focusing on retaining key tenants, reviewing its current mall strategies and working with innovative and creative retailers who are expected to bring the desired impact to the mall.
All malls under the portfolio experienced an uptrend in visitor traffic, showing positive signs of a return in shoppers’ confidence at Hektar malls. Overall visitor footfall count for 1Q 2023 increased to 5.6 million, a massive jump of 33% compared to the same quarter in the preceding year. The Management is constantly working on intensifying marketing events & activities and Corporate Social Responsibility related events to serve the communities in the areas where our shopping centres operate.
En. Johari Shukri bin Jamil, Chief Executive Officer of Hektar Asset Management Sdn. Bhd. said: “Retail activities remained strong in this quarter on the back of festivities. Hektar REIT’s malls are well-positioned as neighbourhood & community malls. This is where our focus and niche are, hence; we continuously aim at improving the overall tenancy mix & occupancies at the malls. For this year, we are planning for Subang Parade’s Repositioning exercise. We believe that remixing of tenancies by bringing in new tenants will complement the existing offerings and will also be able to match the expectations of our loyal patrons. Our focus is on initiatives that will benefit our malls and retailers in the long run through implementing focused strategies that will bring improvements in visitor footfall and encourage higher customer spending, resulting in a continuous positive upward cycle and sustainable returns to our Unitholders. We will continue to sweat our AUM to enhance revenue and NPI. Our committed overall portfolio occupancy is currently 85.4% and will be realised in the subsequent quarters this year. We are in the midst of discussions with prominent & notable tenants to further improve our overall occupancy & tenancy mix.”
Significantly improved Net Property Income by 24.8%
High dividend yield of 11.4% and impressive Annual Return of 60.8%
Increase in Hektar REIT Portfolio Valuation by RM41.6 million
Hektar Asset Management Sdn. Bhd., the Manager of Hektar Real Estate Investment Trust (Hektar REIT), today announced its annual year results for the financial year ended 31 December 2022 (FY2022) with revenue of RM117.5 million, a substantial increase of 21.6% compared with the RM96.6 million for FY2021. The higher revenue is attributed to the increased rental income, including high turnover rent, increased car park income and higher hotel occupancy with an increase in the average room rates. Hektar REIT registered a Net Property Income (NPI) of RM58.7 million, a significant increase of 24.8% compared to RM47 million in the preceding year. Realised Net Income was RM36.4 million, a notable increase of 187% compared to the previous year. The dividend yield for FY2022 was 11.4% which was higher than the pre-Covid period (FY2019), with an impressive annual return of 60.8% based on the share price performance. The Net Asset Value (NAV) per unit for FY2022 was at RM1.27, an increase of 9% compared to RM1.16 in the previous
En. Johari Shukri Bin Jamil, Chief Executive Officer of Hektar Asset Management Sdn. Bhd
Portfolio Performance for FY2022: FY2022 was the year of recovery for the retail sector after the Covid-19 pandemic and the various restrictions & closures it brought. Hektar REIT’s portfolio occupancy showed resilience at 82% as the majority of its assets maintained more than 80% occupancy rate. Our mall, Kulim Central, located in Kedah, continues to grow post refurbishment as its occupancy exceeds 96% with a double-digit valuation increase year-on-year. The Management successfully managed to attract 178 new & existing tenants, covering 22.8% of the total Net Lettable Area (NLA), equivalent to 466,357 sq. ft.
Despite the challenging retail environment, the Management remains steadfast in boosting occupancies by focusing on retaining key tenants, reviewing its current mall strategies, and working with innovative and creative retailers who are expected to bring the desired impact to the mall. According to the Manager, good brands are still expanding and in 2022, new & refreshed retailers were introduced in the malls, such as 4Fingers Crispy Chicken, Machines, Sushi Go, Oppo, Switch, Samsung, Myeong Dong Topokki, Siam Restaurant, Gigi Coffee, Yole Yoghurt, Rollney, Felancy, Pierre Cardin, Vivo and Madam Croffle to name a few.
All malls under the portfolio experienced an uptrend in visitor traffic following Malaysia’s transition to endemicity after the COVID-19 pandemic, showing positive signs of a return in shoppers’ confidence at Hektar malls. Overall visitor footfall count increased to 21.1 million in 2022, a massive jump of 60% compared to last year. It was primarily due to the intensified marketing initiatives, including sales-driven promotional campaigns, various events & activities that were implemented to cater to our loyal shoppers & patrons and Corporate Social Responsibility related events to serve the communities in which our shopping centres operate. All these initiatives have assisted our tenants’ sales to inch closer to pre-pandemic levels of 2019 and helped them improve their cash flow by enjoying reduced occupancy costs.
En. Johari Shukri bin Jamil, Chief Executive Officer of Hektar Asset Management Sdn. Bhd. said: “Hektar REIT has shown tremendous persistence & resilience in FY2022 and has worked closely with our tenants, shoppers & other key stakeholders. Malls are evolving into lifestyle-centric places for people to meet, socialise, interact and learn. We are confident and believe they will remain the preferred destinations for entertainment, social activities and shopping amongst Malaysians as long as our malls stay relevant.”
“Our focus is on initiatives that will benefit our malls and retailers in the long run through implementing focused strategies that will bring improvements in visitor footfall and encourage higher customer spending, resulting in a continuous positive upward cycle and sustainable growth. Our results for FY2022 have shown that our strategies are yielding the desired results. However, we remain cautiously optimistic about the 2023 outlook given the volatile economic landscape driven by hawkish monetary policy in response to inflationary pressure. We will continue to work harder to provide a fulfilling shopping experience to our loyal patrons and sustainable returns to our Unitholders.”
Sustainability & ESG Awards for FY2022: Hektar REIT embarked on energy efficiency & optimisation initiatives in 2017, in line with our commitment and goal to reduce our carbon footprint. The Management Team has been clear on its sense of responsibility, commitment and sincerity towards implementing initiatives and strategies that mitigate climate change associated risks, provide a positive impact on the community, uphold the best governance practices which are also aligned with United Nations Sustainable Development Goals (UNSDGs).
Hektar REIT is a constituent of the FTSE4Good Bursa Malaysia Index and the rating was upgraded from a 3-star to a 4-star in its latest evaluation by FTSE Russell in June 2022. The Management team remains committed to continuously looking at and adopting sustainability-linked initiatives as part of the core strategy & decision-making process. We will continue to enhance our efforts in managing material sustainability matters, including climate change adaptation, pollution prevention, water and waste management, and managing energy consumption, including incorporating renewable energy in our energy mix moving forward. Hektar REIT’s Assets Under Management (AUM) comprise five neighbourhood malls and one regional mall. Since acquiring these properties, our focus has always been on serving our community.
For FY2022, Hektar REIT’s efforts have been recognised and rewarded with three awards for Sustainability & ESG Initiatives:
Hektar REIT has been awarded “Company of the Year” under the “Stakeholder and Community Sustainability Engagement Initiatives” category of the Sustainability & CSR Malaysia Awards 2022.
Hektar REIT was awarded two Silver awards at The Edge Malaysia ESG Awards 2022:
Most Improved Performance Award Over Three Years (for Market Cap below RM300M); and
Property & REIT Sector Award.
The awards recognise and honour Malaysian companies’ commitment to developing and enhancing their business operations according to the Environmental, Social and Governance (ESG) principles.
4Q 2022 Financial Results: For the fourth quarter ended 31 December 2022 (4Q 2022), Hektar REIT recorded revenue of RM27.9 million, which is 11.7% higher than RM25 million for 4Q 2021. Net Property Income was RM10 million for the quarter under review, which was lower by 18.9% compared to the RM12.4 million in the corresponding quarter of the previous year due to the higher upkeep, repair & maintenance expenses that were incurred to cater for improving domestic demand & normalisation of economic activities.
Hektar REIT The Edge Malaysia ESG Awards 2022 Silver Award for Most Improved Performance over Three Years (Below RM300M Market Cap) and Silver Award Under Property & Reit Sector
Hektar REIT wins big at the inaugural The Edge Malaysia ESG Awards 2022
The awards were aimed at honouring Malaysia’s best performers in ESG
Hektar Asset Management Sdn Bhd, the Manager of Hektar Real Estate Investment Trust (Hektar REIT), Malaysia’s first retail-focused REIT, is pleased to announce that Hektar REIT is the proud recipient of two Silver awards at the inaugural of The Edge Malaysia ESG Awards 2022: Most Improved Performance Award Over Three Years (for Market Cap below RM300M) and Property & REIT Sector Award.
Muhammad Bakhtiar Ul Haq, Assistant Manager, IR, ESG & Special Projects of Hektar Asset Management; Mohd Zaharim bin Mohd Yatim, Senior Manager, Special Projects of Hektar Property Services; Syairul Irwan Rased, Assistant GM, Business Strategy, Martin Chen, GM, Legal, Zarina Halim, CCO, Johari Shukri bin Jamil, CEO and Lim Kek Siang, Senior GM, Finance of Hektar Asset Management and Sanggat Singh, Senior Manager, Group Facilities Management of Hektar Property Services [L-R]
The Edge Malaysia editor-in-chief Kathy Fong; Bursa Malaysia chief executive officer Datuk Muhamad Umar Swift; Johari Shukri bin Jamil, Chief Executive Officer of Hektar Asset Management Sdn Bhd; Helena Fung, the head of sustainable investment for Asia-Pacific at FTSE Russell; and Datuk Ho Kay Tat, the publisher and group CEO of The Edge Media Group [L-R]
The awards seek to recognise and honour Malaysian companies for their commitment to developing and enhancing their business operations according to the Environmental, Social and Governance (ESG) principles. The award ceremony was held at a gala dinner at the Sunway Resort Hotel on 28 November 2022.
The Edge Malaysia ESG Awards 2022 comprised two categories – the Equity Awards and the Fund Awards. The Equity Awards were organised in collaboration with Bursa Malaysia and FTSE Russell and the Fund Awards were in collaboration with the Securities Commission and Morningstar. These awards were aimed at promoting ESG adoption and leadership amongst industry leaders and professionals by recognising their contributions and successes. Hektar REIT qualified under the category of Equity Awards, whereby a company must be listed on Bursa Malaysia and be a constituent of the FTSE Bursa Malaysia EMAS index as of June 2022.
En. Johari Shukri bin Jamil, Chief Executive Officer of Hektar Asset Management Sdn. Bhd. (Hektar Asset Management), the Manager of Hektar REIT said: “We are honoured to be conferred with these prestigious awards, a testament and recognition of our efforts in driving Sustainability initiatives since we embarked on the core focus on its three pillars of E, S and G across the organisation in 2017. Our commitment to ESG principles is long-term, as we recognise that all of us have a responsibility to our stakeholders. We remain committed to further advancing our efforts in managing material sustainability matters in the area of environmental conservation, including climate change mitigation and adaptation, water & waste management, and managing energy consumption, including incorporating renewable energy in our energy mix.” En Johari emphasised that the company will continue to ensure that its initiatives are in accordance with the company’s corporate social responsibility (CSR), industry best practices and investors’ expectations. Over the years, Hektar REIT has joined hands through many partnerships and collaborations with local and international organisations, providing support to NGOs’ and charity programs to support underprivileged and marginalised communities besides advancing and empowering women to improve their financial independence for the benefit of families.
“We recognise the need for responsible sourcing and are working closely with external parties, such as our tenants and vendors, to reduce our carbon footprint across the value chain. An example is the recently introduced Reverse Vending Machine (RVM) to recycle plastic bottles and cans at Subang Parade as a pilot project to play our role and reward our loyal patrons with vouchers for redemption for their continued commitment to becoming a part of a responsible society. We will also continue integrating ESG into all aspects of our business, from financial management to operations and future planning to deliver resilient and sustainable long-term value for our stakeholders.”
In June 2022 FTSE Russell evaluation, Hektar REIT was upgraded from a 3-star to a 4-star ESG rating on the FTSE4Good Bursa Malaysia Index (F4GBMI). Based on the F4GBMI evaluation of the results, Hektar REIT is inspired and encouraged to continue its efforts to improve initiatives in all three core areas of Environmental, Social & Governance and embed these core principles into its business DNA.
Hektar Asset Management Sdn. Bhd., the Manager of Hektar Real Estate Investment Trust (Hektar REIT) is pleased to announce the appointment of En. Johari Shukri bin Jamil, 50, as the Chief Executive Officer (CEO) of Hektar Asset Management effective 11 June 2022.
En. Johari Shukri bin Jamil, CEO of Hektar Asset Management
En. Johari Shukri bin Jamil, CEO of Hektar Asset Management (Link) En. Johari will succeed Dato’ Hisham bin Othman, 60, who has reached mandatory retirement age after helming Hektar Asset Management as CEO since May 2016. The Board would like to extend its appreciation to Dato’ Hisham for his valuable contribution & service and wish him all the best in his future endeavours.
En. Johari who was appointed to the Board of Directors of Hektar REIT as Non Independent Non Executive Director in February 2022 and who is now redesignated as the Executive Director/CEO, brings over 20 years of extensive corporate experience, holding senior leadership positions in various industries, including Real Estate & Industrial Development, Logistics & Engineering.
His expertise in asset management, corporate finance, strategy, operations & managing businesses to achieve the desired results through transformational initiatives is very relevant to the REIT and is expected to be put to good use in leading Hektar REIT to continue its post pandemic recovery and to chart new strategic initiatives. En Johari holds a Bachelor of Science in Chemical Engineering from UTM and a Certificate in Advanced Leadership Program from the Judge Business School of the University of Cambridge.
The Board & the Management looks forward to working with En. Johari to take Hektar REIT to the next phase of growth as we continue our drive to optimise and grow the REIT’s portfolio for stable and sustainable returns to our Unitholders.
About Hektar Real Estate Investment Trust
Hektar Real Estate Investment Trust (Hektar REIT) is Malaysia’s first listed retail-focused REIT. The primary objectives of Hektar REIT are to provide unitholders with sustainable dividend income and to achieve a long-term capital appreciation of the REIT. Hektar REIT was listed on the Main Market of Bursa Malaysia Securities Berhad on 4 December 2006 and currently owns 2 million square feet of retail space in 4 states with assets valued at RM1.16 billion as at 31 December 2021. The REIT’s strategic partner is Frasers Centrepoint Trust, part of Frasers Property Ltd, headquartered in Singapore. Hektar REIT is managed by Hektar Asset Management Sdn Bhd and the property manager is Hektar Property Services Sdn Bhd. Hektar REIT’s portfolio of commercial properties includes Subang Parade in Subang Jaya, Selangor; Mahkota Parade in Melaka; Wetex Parade & Classic Hotel in Muar, Johor; Central Square in Sungai Petani, Kedah; Kulim Central in Kulim, Kedah and Segamat Central in Segamat, Johor. For more information, please visit www.HektarREIT.com
For more information or inquiries, please contact: Hektar Asset Management Sdn Bhd Investor Communications Tel: +603 6205 5570 Fax: +603 6205 5571 Email: ir@HektarREIT.com Web: www.HektarREIT.com
Investor RelationsTel: +603 6205 5570Fax: +603 6205 5571Email: ir@HektarREIT.comWeb: www.HektarREIT.com
