Hektar Asset Management Sdn. Bhd., the Manager of Hektar Real Estate Investment Trust (“Hektar REIT”), is pleased to announce the financial results for the second quarter of the fiscal year ending June 30, 2024 (“Q2 FY2024”).
This quarter showcases a substantial improvement in financial performance, primarily driven by new revenue streams from Kolej Yayasan Saad and effective operational management.
In Q2 FY2024, Hektar REIT reported a revenue of RM36.6 million, reflecting a 34.4% increase compared to RM27.2 million in the same quarter of the previous year (“Q2 FY2023”).
This impressive growth was largely due to the rental income recognized from the newly acquired education asset, Kolej Yayasan Saad (“KYS”). The Net Property Income (“NPI”) also saw a significant rise, increasing by 33.7% from RM15.5 million to RM20.7 million. Furthermore, Net Realised Income surged by 42.8% to RM9.9 million during this period.
The quarter also saw an encouraging rental reversion rate across all Hektar Malls, with an overall reversion rate recorded at 6.4%. Regarding tenancy renewals, 28 renewals and new leases were secured, accounting for 3.2% of the portfolio’s net lettable area.
To date, a total of 62 renewals and new leases, covering 259,676 square feet or 12.7% of the retail portfolio’s net lettable area, have been completed. Negotiations for other expiring tenancies are progressing well and are expected to conclude by the end of the year.
As a result of the strong financial performance, the Manager of Hektar REIT has declared an interim income distribution of 1.9 sen per unit for Q2 FY2024, amounting to RM13.4 million.
This translates to an annualized dividend yield of 6.4% based on the closing price of RM0.595 on June 28, 2024.
The Income Distribution Reinvestment Plan (“IDRP”) will be implemented, giving unitholders the option to reinvest their dividends into new units. This initiative aligns with Hektar REIT’s objectives of capital growth and preservation, offering unitholders an opportunity to enhance their investments.
As of Q2 FY2024, the overall occupancy rate at Hektar Malls stood at 87.2%. The secured occupancy rate has further improved to 89.3%, with tenants committed to opening their doors in the coming quarters.
These positive figures result from Hektar REIT’s enhanced leasing strategies, continuous Asset Enhancement Initiatives (“AEI”), and a robust outlook for the retail industry in the second half of 2024.
Looking ahead, the Manager’s focus remains on the overall repositioning of Subang Parade. Urban Agenda Design Sdn Bhd has been appointed as the lead architect for the rejuvenation project, which includes both interior and exterior upgrades scheduled over three years.
The project is currently in the detailed design phase, with on-site work expected to begin in Q1 2025. The management anticipates improved occupancy levels, positive rental reversions, increased property valuation, and higher visitor traffic post-renovation.
Sabrina Halim, Chief Operating Officer of Hektar Asset Management Sdn. Bhd., commented on the results, stating that the successful acquisition of their first non-retail asset marks a significant milestone in their diversification strategy.
This move not only broadens their portfolio but also enhances resilience against market fluctuations, providing a more stable revenue stream.
Looking forward, the Manager aims to double Hektar REIT’s portfolio size to RM3 billion by 2027, focusing on a balanced mix of core retail assets and resilient properties like education and light industrial assets.
For more information, please visit www.HektarREIT.com
