Hektar Real Estate Investment Trust (“Hektar REIT”) announced its annual results for Financial Year 2018 (“FY18”) with revenue rising to RM135.1 million, up 7.6% higher compared to the same period in the preceding year, while Net Property Income (NPI) climbed to RM78.7 million, a 6.8% increase.
For the 12 months ended 31 December 2018, the Realised Income was recorded at RM42.3million which was 5.3% higher than FY2017. Overall, the market valuation of the Hektar portfolio increased by RM26.9 million in 2018.
The positive result is supported by strong portfolio performances, particularly from assets outside the Klang Valley, buoyed by the post-refurbishment asset enhancement initiatives in the Kedah malls and positive rental reversion growth in Melaka and Muar.
For the fourth quarter ended 31 December 2018, the REIT recorded higher revenue of RM33.9 million, an increase of 1.3% compared to the corresponding period in 2017 (“4Q17”). Net Property Income recorded was RM20.3 million, a small variation from the RM20.9 million in 4Q17.
The Realised Income before taxation grew to RM12.0 million, showing a marginal increase of 1.8% from 4Q17.
Hektar REIT declared a final income distribution per unit (“DPU”) of 2.31 sen for the fourth quarter ended 31 December 2018. The Book Closing Date is 15 March 2019 and the final distribution will be made on 10 April 2019.
Based on the closing price of RM1.11 on 31 December 2018, the annualised DPU for the year represented a DPU yield of approximately of 8.1%.
“Hektar’s solid track record for occupancy, year-on-year increase in revenues and also net property income remains steadfast. It was a very busy year for us as we focused on improving our shopping centres under our portfolio which included asset enhancement initiatives, energy saving initiatives, extensive tenancy remixing and reconfiguration of space on top of taking over the operations of Classic Hotel, the hotel adjoining Wetex Parade in Muar. We strive to make sure that we achieve our goals in ensuring we deliver value to our unitholders. For the last 12 months period, the REIT has declared a total distribution of RM41.6 million or 9.01 sen. We are proud that the REIT has and continues to deliver returns to the unitholders and stakeholders despite the challenging market condition and growing competition,” said Chief Executive Officer, Dato’ Hisham bin Othman.
The main drivers of positive rental reversions were Kulim Central with 16.4%, Mahkota Parade with 15.0%, Wetex Parade with 11.8% and Central Square with 11.5% increases. For FY2018, the overall portfolio managed to achieve a healthy rental reversion of 5.4% through approximately 160 new and renewed tenancies on over 827,332 square feet or 40.9% of the NLA. Overall occupancy remained steady at 92.1%.
Overall annual visitor traffic increased to 32.1 million visits, up 9.2%, mainly due to the addition of Segamat Central. Within the portfolio, the main drivers for traffic visit increases include Central Square, up 18.4% and Kulim Central, up 81.8% from the previous years.
Both malls have gone through refurbishment and asset enhancement initiatives in 2015 and 2017 respectively and continue to show positive endorsement from shoppers and retailers alike.