KIP REIT to add industrial and commercial properties to its assets portfolio
KIP Real Estate Investment Trust (KIP REIT), a pure retail player, will diversify its assets portfolio to include real estate used for industrial and commercial purposes.
Unitholders had, during KIP REIT’s shareholders’ meeting held on September 29, 2020, approved the proposal to amend its existing investment policy enabling the Manager (of KIP REIT) to diversify its assets portfolio.
KIP REIT said in a filing with Bursa Malaysia that the amended policy provides the Manager a new avenue to source and evaluate offers from a broader range of assets to grow the fund.
A diversified product portfolio would also create greater value for its unitholders with more diverse income-producing assets, it said.
KIP REIT Management Sdn Bhd managing director Datuk Chew Lak Seong said there are challenges currently, due to the Covid-19 pandemic.
“Shopper traffic has gradually normalised albeit at a muted rate at all our malls since the implementation of the recovery Movement Control Order (MCO) back in June 2020. Operationally, proactive measures will continue to be taken, including supporting our tenants through active engagement in open discourse on community updates.
“However, as the government has reimposed the conditional MCO from October 14 to October 27, 2020, to curb the rising Covid-19 cases in Selangor and Sabah, we remain vigilant given the uncertainties and the impact on consumer sentiments which may cause the portfolio’s performance to be flattish for the remainder of the financial year,” he said in a filing with Bursa Malaysia.
KIP REIT currently has a portfolio of seven properties, with a total net lettable area of about 1.5 million square feet and a total asset value of RM840.6 million.
The seven properties are six KIPMalls located in Bangi, Tampoi, Kota Tinggi, Masai, Senawang and Melaka, and AEON Mall Kinta City in Ipoh.
KIP REIT recorded a higher (realised) pre-tax profit in the first quarter ended June 30, 2021 (Q1FY2021), despite amortising RM700,000 rental rebates.
The realised pre-tax profit was 65.2 per cent higher at RM8.8 million versus Q1FY2020’s RM5.3 million, despite the current economic climate’s uncertainties and softer consumer sentiments, Chew said.
Chew said the pre-tax profit during Q1FY2020 was bogged down by the one-off expenses of RM3.5 million incurred in relation to the acquisition of AEON Mall Kinta City.
Net property income (NPI) in Q1FY2021 increased by 3.7 per cent to RM14 million as versus to RM13.5 million recorded in the preceding year’s corresponding quarter.
Chew said the improvement in NPI was mainly attributed to a 15.2 per cent decline in property operating expenses to RM4.2 million, arising from a discount given by Tenaga Nasional Berhad and overall better cost management.
Source: NST