KUALA LUMPUR: KLCCP Stapled Group is positioning operational discipline, stable asset performance and selective capital management as its main buffers to sustain earnings growth and dividend consistency in 2026.
This is as the real estate investment trust (REIT) sector faces softer consumer sentiment, fresh competition and the end of withholding tax concession, which analysts believe will compress post-tax yields.
The group – comprising KLCC Property Holdings Bhd and KLCC-REIT – declared a record total dividend of 47 sen per stapled security for the financial year ended Dec 31, 2025 (FY25), representing a 5.6% increase from a year earlier.
KLCCP chief executive officer Datuk Mohd Salem Kailany said the payout was anchored by actual operating performance rather than non-cash valuation gains, with recurring income remaining key to its distribution strategy.
“Basically 90% of the profit will be distributed, that we will continue to provide. And given our track record, whether we are able to achieve, I suppose our track record to speak for itself,” he said at a press briefing after the group’s AGM yesterday.
The statement reinforces KLCCP’s long-standing positioning as a yield- focused counter whose appeal rests on predictable cash generation from its prime office, retail and hotel assets clustered around Kuala Lumpur City Centre (KLCC).
He said sustaining that consistency in a more demanding operating environment will depend less on aggressive revenue expansion and more on extracting stronger margins from existing assets.
“While the revenue growth is single digit, we are able to extract more profit. That is the discipline of managing our costs.
“These are done through the sustainability agenda, through cost optimisation,” Mohd Salem said, adding that the group intends to continue that approach while seeking incremental revenue upside.
That strategy comes at a time when retail landlords are watching consumer spending more closely as new malls enter the Klang Valley market and tenant negotiations become more competitive.
For Suria KLCC, he said tenant sales have moderated from post-pandemic peaks but remain healthy enough to support rental growth.
“We track the moving annual turnover for Suria KLCC. It is now stabilising around RM2.7bil on an annualised basis. At the highest it went up to slightly over RM3bil, but RM2.7bil is a stabilising position.”
Tenant occupancy costs, he added, remain manageable at below 20% on average against revenue, allowing room for renewals and single-digit rental reversions to continue.
“In terms of renewals and related matters, it will still be doable. I do not want to make what you would call empty promises, but suffice to say, so far, we have been able to achieve single-digit rental growth.”
The group also believes footfall management remains critical to preserving tenant resilience.
“As long as the tenant is happy doing business, I suppose rental review will not be much of a concern to them.”
On capital deployment, he indicated that the group will remain highly selective, with no immediate overseas acquisitions despite earlier discussions about international expansion.
“While we are very selective on reviewing potential acquisitions, our focus remains within the context of Malaysia. At the moment there is no plan for us to go overseas yet,” he said.
A separate pressure point for Malaysian REITs is the cessation of the 10% withholding tax exemption on distributions to foreign institutional investors, a move that has raised concerns about sector competitiveness relative to Singapore-listed REITs.
KLCCP chief financial officer Ahmad Hakimi Muhammad Radzi, however, said the direct impact on its own register is limited because of the current shareholder composition.
“I think by just looking at how our share price has moved since then, yes, I would not say that it has not had an impact, but the impact to KLCCP, for us, is minimal. I think it is mostly reflective of our shareholding mix,” he pointed out.
