Hektar REIT maintains positive outlook amid financial challenges

HEKTAR Real Estate Investment Trust (Hektar REIT) has reaffirmed its commitment to prudent financial management, cost optimisation, and enhanced asset efficiencies to mitigate current economic impacts.

“Hektar REIT remains positive & resilient in achieving growth backed by increased occupancy rates and improving rental reversions for properties under the portfolio,” it said in a filing with Bursa Malaysia.

For the first quarter ending March 31, Hektar REIT reported a net profit of RM5.08 mil, down from RM9.2 mil in the same period last year. This decline translates to an earnings per share of 0.86 sen, compared to 1.94 sen previously. Revenue for the quarter saw a slight decrease, falling to RM28.4 mil from RM28.9 mil a year ago.

The net property income also declined to RM14.4 mil from RM15.2 mil, attributed to ongoing tenancy remixing initiatives and increased utility costs. Nonetheless, effective operational management enabled the trust to achieve a realised net income of RM5.1 mil.

Hektar REIT’s portfolio achieved an occupancy rate of 87.2% for the first quarter, with a secured occupancy rate of 88.5%. This performance is credited to continuous asset enhancement initiatives (AEI) and an improved leasing strategy, which are expected to drive better reversion rates moving forward.

A significant development within the portfolio includes the extensive repositioning of Subang Parade. This project involves introducing new key tenants from the entertainment, leisure, and health and fitness sectors, upgrading older lifts and escalators, and undertaking an interior uplift. These improvements are slated for completion by the first half of 2025, to be followed by facade upgrades and placemaking initiatives.

“Our recent diversification strategy is aligned with our objective to deliver attractive returns to our unitholders by injecting assets with accretive yield into Hektar REIT,” said Hektar Asset Management Sdn Bhd CEO Johari Shukri Jamil.

“We are actively looking to build up our investment pipeline to increase the revenue and assets under management (AUM) for long-term sustainable growth of Hektar REIT.” – May 23, 2024

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