KIP REIT earnings up on higher rate of occupancy

PETALING JAYA: KIP Real Estate Investment Trust (KIP REIT) reported higher revenue and earnings for the second quarter ended Dec 31, 2017, thanks to higher occupancy rate, the festive season and lower expenses.

During the quarter in review, the fund’s net profit rose 15% quarter-on-quarter (q-o-q) to RM8.75mil, while its revenue grew 2.4% q-o-q to RM15.68mil.

The improvement was due to the occupancy rate improving from 82.3% to 85% in the current quarter and the “Back to School” season, the fund said in a statement.

In addition, the fund recognised lower upkeep of building as well as marketing and advertising expenses during the quarter, resulting in a higher bottom line.

KIP REIT’s earnings per unit stood at 1.73 sen for the quarter in review, compared with 1.51 sen in the preceding quarter.

KIP REIT Management Sdn Bhd managing director Datuk Chew Lak Seong said the fund would likely continue doing well in the coming quarters.

“We expect the fund’s performance to continue improving as we constantly undertake asset enhancement initiatives to ensure that the properties will become more appealing to our tenants,” Chew said in a statement.

He said it would also continue to assess offers to inject third-party properties into the fund.

“The trustee currently also holds the right of first refusal for the acquisition of KiP Mall Kota Warisan – that was completed and soft launched on Aug 29, 2017 – which we will assess when the asset has reached a matured stage,” he added.

KIP REIT Management Sdn Bhd, which is the manager of KIP REIT, has declared an interim distribution per unit (DPU) of 1.75 sen, amounting to about RM8.75mil, which would be paid to unitholders on Feb 28.

Based on its current price, the DPU will translate into a distribution yield of about 8%, which is among the highest offered by Malaysian REITs. KIP REIT closed half a sen lower at 84 sen yesterday.

KIP REIT, which made its debut on the local bourse last February, is the first hybrid community-centric retail REIT.