PETALING JAYA: Hektar Real Estate Investment Trust's (REIT) strong performance in its third quarter ended Sept 30 may be attributed to shareholder Singapore-listed Frasers Centrepoint Trust (FCT), said an analyst with a local brokerage.
As both were pure-play retail REITs, Hektar REIT was able to tap FCT's expertise in financial, property fund management and real estate asset management services, he said.
Hektar REIT's shopping mall Mahkota Parade is 93.9% occupied
In June, FCT acquired a 27% stake in Hektar REIT for RM104mil. FCT is managed by Frasers Centrepoint Asset Management Ltd, a real estate asset and fund management division of Frasers Centrepoint Ltd, which in turn is a member of the Fraser & Neave Ltd group.
The analyst believed that Hektar REIT had acquisition plans to build on its greenfield assets, but he did not elaborate.
In a statement issued on Wednesday, Hektar REIT said it recorded net property income of RM11.74mil on revenue of RM18.33mil for its third quarter.
Earnings per share was at 2.78 sen, 25.3% higher than earnings forecast, it said, adding that net asset value per unit for the third quarter was RM1.04 while provision for income distribution was RM7.68mil.
Hektar REIT, managed by Hektar Asset Management Sdn Bhd, announced a third distribution per unit (DPU) of 2.4 sen for the quarter and said it was on track to achieve the annual forecast DPU of 9.6 sen.
Hektar Asset Management chief executive officer Datuk Jaafar Abdul Hamid said: “Hektar will distribute to unitholders 9.6 sen for the 13-month period ending Dec 31, or 90% of actual earnings, whichever is higher.
“It will continue to make progress on its growth strategy in terms of organic growth within the portfolio, third-party acquisitions and Hektar group's greenfield and redevelopment projects.”
Hektar REIT's shopping mall portfolio continued to perform with near full-term occupancy of 95.6% in the third quarter, of which Subang Parade was 99.1% occupied and Mahkota Parade 93.9% occupied.
“Portfolio rental reversions continue a positive trend with the third quarter reporting 21 new or renewed tenancies with an average rental increase of 10%.”
Meanwhile, Axis REIT also recorded strong performance for its third quarter ended Sept 30, with net profit of RM37.4mil on revenue of RM11.93mil.
“The better performance was mainly due to a revaluation surplus of RM29.9mil in relation to its five original properties, giving it a net profit of RM7.5mil,” said an analyst with Aseambankers.
Axis REIT was also projected to improve its performance in the fourth quarter ended Dec 31, with a full-quarter contribution from the recently acquired SKS Warehouse and Giant Hypermarket, the analyst added.
He said Axis REIT's proposal to raise fresh capital via the issuance of up to 50 million new units in the fourth quarter would help recapitalise its balance sheet.
This would allow it to gear up for further acquisitions, in line with its target to double its asset size to RM800mil by year-end.
Axis REIT, the largest industrial REIT, recorded changes in fair value of its investment properties worth RM29.92mil, a surplus of the appraised values of its five initial public offering properties.
In a statement, it said the income available for distribution for the third quarter was RM7.52mil.
“Our recent acquisitions have contributed positively to the earnings of the fund.
“It has fuelled the DPU growth from 6.1 sen per unit in the first half ended June 30 to 9.71 sen per unit for the nine months ended Sept 30,” said executive director Stewart LaBrooy in the statement.
He added that a provision was made to distribute 99.7% or RM7.44mil of the realised pre-tax income for the third quarter.
Axis REIT's fund size stood at 205.9 million units for the third quarter, the company said.
By The Star (By Shannen Wong)
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