KUALA LUMPUR: Despite the uncertain external demand and post-Goods and Services Tax (GST), Hektar Asset Management Sdn Bhd (Hektar) remains optimistic that its real estate investment trust (REIT) will deliver a strong performance this year.
The asset manager of the Hektar Real Estate Investment Trust’s malls are worth RM1.06bil and the market catchment of these properties is more than three million Malaysians.
The malls are Wetex Parade (Muar), Mahkota Parade (Malacca), Subang Parade (Petaling Jaya), Central Square (Sungai Petani) and Landmark Central (Kulim).
Hektar chairman and CEO Datuk Jaafar Abdul Hamid said he was cautiously optimistic that its REIT performance will remain strong this year.
Despite a 4.1% plunge in its realised earnings, REIT maintained its income distribution of 10.5 sen per unit last year.
The company’s realised earnings per unit in 2014 was 11.05 sen compared to 11.52 sen in 2013.
On the dip in earnings, Jaafar said it was due to the renovation and upgrading at Central Square that required the closing of the 5th floor and some stand-alone counters.
“This asset enhancement initiative has been completed and we look forward to higher rental income from the refurbished retail space,” he added. Hektar is looking to carry out more AEI programs for its other malls.
Jaafar noted the company’s malls need improvement due to highly competitive environment in the industry.
“More and more Malaysians spend their free time in malls. With our malls being strategically placed, all we need to do is ensure that we are able to offer shoppers what they need,” he said.
For FY 2014, Hecktar’s revenue increased 1.5% to RM121.99mil from RM120.24mil even though there was an interest rate hike of 25 basis points last year. Net profit fell 14.26% to RM50.39mil for FY14 from RM58.77mil a year ago.
Although the shortfall in earnings, the company said the board has decided to distribute the same amount to its shareholders.
“Hektar has protected its unitholders from the vagaries of rising costs,” Jaafar said.
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