MRCB Quill upbeat to ride out the current storm

MRCB Quill Management Sdn Bhd (MQM), the manager of MRCB-Quill real estate investment trust (REIT) is upbeat that the Trust will ride out the current down cycle as it continues to focus on cost management, tenant retention and optimisation of rental contribution.

MQM chairman Tan Sri Saw Choo Boon said MQREIT’s tenants have progressively returned to their offices since the commencement of the recovery movement control order (RMCO) on June 9, 2020.

As at June 30, 2020, MQREIT’s average portfolio occupancy was stable at 90.4 per cent.

MQREIT currently owns five buildings in Cyberjaya, four in Kuala Lumpur and one in Penang. They are valued at RM2.14 billion collectively, as at December 31, 2019.

MQM is owned by Malaysian Resources Corp Bhd (41 per cent), Quill Resources Holding Sdn Bhd (39 per cent), and Global Jejaka Sdn Bhd (20 per cent)

The firm’s chief executive officer Yong Su-Lin said MQREIT’s second-quarter 2020 (2Q2020) results as compared to 1Q2020 results reflected the impact of the prior year’s tenant mix repositioning and the rental rebates for certain small and medium enterprise tenants amidst Covid-19.

“Retaining and supporting our tenants through the Covid-19 challenges remains our priority,” she said in a statement.

Yong said due to the MCO, leasing activates were relatively muted in 2Q2020, and renewals for the year are concentrated in the last quarter.

In 2020, 19 per cent of MQREIT’s total net lettable area (NLA) or about 371,000 square (sf) feet (ft) are due for renewal.

Around 9.6 per cent or 36,000 sq ft of the total 371,000 sq ft of leases were due in 1H2020.

MQM said in a filing with Bursa Malaysia that 40 per cent of the leases due in 1H2020 have been renewed.

The firm has started early negotiations for the balance of these leases with the intention to lock in the tenancy ahead of its expiry as it expects the Klang Valley office market to remain challenging.

Yong said negotiations are progressing as scheduled for the balance of leases expiring in the second half of 2020 which represents about 90 per cent of the total leases due for renewal in 2020.

“We have been engaging with key strategic tenants on lease renewals well ahead of lease expiry in anticipation of early lease renewals for some of these leases. Since the RMCO, MQREIT has progressively stepped up it’s marketing efforts to find new tenants for the remaining 9.6 per cent vacant space,” she said.

MQREIT recorded a realised net income and realised earnings per unit of RM38.87 million and 3.63 sen respectively, for the six months to June 30, 2020, an increase of 8.4 per cent from the corresponding period.

Net income for 2Q2020 improved by 16 per cent to RM19.08 million compared to the preceding quarter.

This was largely contributed by Platinum Sentral, Menara Shell, and Tesco Penang, after incorporating rental rebates that have already been provided for retail SME tenants predominantly in Plaza Mont Kiara.

Source:  NST