MRCB-Quill REIT (MQREIT), a listed real estate investment trust, has posted a realised net income of RM19.8 mil for its 1Q20 results, a 2% increase over the same period a year ago.
The company said in an exchange filing today that the increase in realised net income was due to higher revenue generated from its properties and lower finance cost, administration expenses, trustee and manager’s fee.
MQREIT recorded a realised earnings per unit (EPU) and distributable income per unit of 1.85 sen in 1Q20 which was approximately 2% higher than the EPU and distributable income per unit of 1.81 sen registered in 1Q19.
“During this unprecedented Covid-19 pandemic, we are committed to weather this challenging period and to provide support where necessary to our stakeholders. We have put in place the necessary precautionary measures at our properties to mitigate the risk of exposure to Covid-19.
“We will extend assistance via rental support to our retail tenants who have been badly affected by the nationwide Movement Control Order (MCO) initiated since March 18,” said Saw Choo Boon, the company’s chairman.
“Amidst market uncertainties, MQREIT will remain vigilant on managing cash flow and exercising financial discipline to continue delivering value to its unitholders. During this period, proactive lease management, tenant retention and maintaining a strong balance sheet remain our top priorities.
“MQREIT has been able to sustain a stable occupancy and healthy weighted average lease expiry (WALE), which stood at 4.65 years as of March 31, 2020. MQREIT’s average occupancy rate stood at 90.5%.”
Company CEO Yong Su - Lin said that in terms of lease renewal, MQREIT has approximately 370,000 sq ft (19% of its total leased net lettable area) due for renewal in 2020 with the bulk of them due in 4Q20; 93% of the leases due in 1Q 20 have been renewed and early negotiations have begun for the bulk of the leases due in 4Q20.
Yong added that in terms of capital management, MQREIT continues to be in a stable financial position to meet its financial and operational obligations, with a gearing ratio of 38.3% as at March 31, 2020, well within Securities Commission’s threshold of 50%.
MQREIT’s RM335 mil borrowings due on 30 March 2020 were refinanced for another five years, thereby increasing its debt average term to maturity to 3.32 years as of March 31, 2020.
Yong also said that after this refinancing, about 54% of its total borrowings were on floating interest rates.
“While we expect the low-interest-rate environment to persist, MQREIT will consider swapping some of its floating interest rate exposure to fixed-rate at an appropriate time to cushion it from any potential rise in interest rates in a volatile market environment,” added Yong. - June 17, 2020