Quill sees long-term gains in assets tenanted by blue-chip firms

PETALING JAYA: Commercial real estate investment trust Quill Capita Trust (QCT) believes that quality commercial assets tenanted by blue-chip companies not only offer a stable income stream but will also generate sustainable long-term total returns on investment despite the challenging economic climate.

Chief executive officer Chan Say Yeong said blue-chip companies usually tenanted QCT's assets on a long-term basis with step-up rental rates.

“In keeping up with the quality blue-chip tenants, we are focused on continuously improving building and tenant relations. These provide QCT with organic rental growth,” he told StarBiz yesterday.

QCT recently announced a 140.4% increase in revenue to RM13.7mil for the second quarter ended June 30 from RM5.7mil recorded in the previous corresponding quarter.

Meanwhile, net profit jumped 81.1% in the quarter to RM6.7mil from RM3.7mil previously.

Earnings per share rose to 1.73 sen from 1.54 sen.

The company attributed the better results to full revenue and income contribution from recent acquisitions, namely Wisma Technip and commercial units and car park of Plaza Mont Kiara acquired in September last year, Quill Building 5-IBM, Quill Building 8-DHL and Quill Building 10-HSBC purchased in March this year.

RHB Research in a report said that despite the jump in revenue, the company experienced about a 5% decline in net profit from the preceding quarter partly due to one-off maintenance costs.

“However, despite rising inflation, we do not expect property maintenance costs to affect the company significantly in the future as we understand that it has the rights to pass on the increase to its tenants via higher service charges,” the report added.

The company recently proposed to acquire the Tesco building in Jelutong, Penang, for RM132mil from IJM Properties Sdn Bhd.

According to Chan, upon the completion of the acquisition in the fourth quarter, QCT’s asset size would increase to RM810mil, exceeding the original forecast of RM750mil for the current financial year ending Dec 31.

New assets in the pipeline include the new HSBC headquarters and KL Sentral Lot J.

“The Kuala Lumpur office market is experiencing an upturn due to healthy demand from business expansion, especially in finance, insurance as well as the oil and gas sectors,” Chan said, adding that take-up rate was expected to remain healthy.

By The Star (by Laalitha Hunt)