KIP REIT plans to diversify asset portfolios


KIP REIT Management Sdn Bhd executive director Datuk Eric Ong Kook Liong said the financial performance of the first-quarter period was within management’s expectations amid the disruptions caused by the Covid-19 pandemic.

KUALA LUMPUR: KIP Real Estate Investment Trust (KIP REIT) reported a lower net profit of RM8.37mil in its first quarter ended Sept 30, 2021, compared with RM8.85mil in the previous corresponding period.

In a filing with Bursa Malaysia yesterday, it said revenue in the first quarter was lower at RM17.14mil compared with RM18.23mil a year earlier.

“The decrease in revenue was mainly due to lower promotional area income on the back of restrictions on activities or events in malls,” it said.

It added that average occupancy rates decreased during the period under review.

“The net property income also came in lower, in tandem with reduced revenue as compared to the previous corresponding quarter at a lower negative variance, due to careful cost management.”

Additionally, KIP REIT said its operations in the southern region recorded revenue of RM8mil during the first quarter, which was a 12.4% shortfall compared with the previous corresponding quarter, due to lower promotional area income.

Meanwhile, performance in the central region during the period under review was 7.2% lower year-on-year.

Business in the northern region, on the other hand, recorded a 9.6% year-on-year improvement in revenue during the quarter, mainly due to step-up in rents upon the renewal of lease agreements effective September 2020.

Separately, in a statement, KIP REIT Management Sdn Bhd executive director Datuk Eric Ong Kook Liong said the financial performance of the first-quarter period was within management’s expectations amid the disruptions caused by the Covid-19 pandemic.

“We welcome the news of moving the country into the endemic phase with a declining trend in average daily cases and 90% of the adult population being fully vaccinated.

“We have seen a boost in consumer confidence and business sectors are also entering into a recovery phase with operations becoming less disrupted. Nonetheless, we remain vigilant and continue to practise fiscal prudence to keep our expenses manageable.”

Going forward, Ong said KIP REIT remains hopeful of the coming quarters and will continue to monitor the market, adapting to the situation appropriately for the future growth of the company and its unitholders.

“We will also continue to evaluate viable opportunities to diversify our asset portfolios into different classes in the commercial and industrial assets,” he said.

KIP REIT also declared a first interim distribution per unit (DPU) of 1.55 sen, amounting to RM7.8mil, for the first quarter of its current financial year.

“The book closure and payment dates in respect of the proposed income distribution are Nov 5 and Nov 23, respectively. Based on the closing price of 84 sen on Oct 20, 2021, the annualised DPU gives a yield of approximately 8.14%,” it said.

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