KUALA LUMPUR (Jan 15): KIP Mall Kota Warisan, the retail mall in Sepang owned by the Kepong Industrial Park Group, may be injected into KIP Real Estate Investment Trust (REIT).
“We are currently exploring the possible injection of KIP Mall Kota Warisan into the fund by the year 2020, and will also continue to look at any yield-accretive third party properties for acquisition,” said Datuk Chew Lak Seong, managing director of KIP REIT Management Sdn Bhd, the manager of KIP REIT.
KIP Mall Kota Warisan is part of the 37-acre KIP Sentral development in the Kota Warisan township. KIP Sentral, which is envisioned as Kota Warisan’s future commercial hub, also comprises Core SoHo Suites, shop lots and KIP Hotel.
In a statement, Chew said KIP REIT’s recently-acquired Aeon Mall Kinta City in Ipoh will contribute a gross yield of 7.8% per annum to the fund.
Meanwhile, KIP REIT’s net property income fell 3.4% for the second quarter ended Dec 31, 2018 (2QFY19) to RM10.45 million, from RM10.82 million a year earlier, on lower rental fee and higher property operating expenses, despite a higher occupancy rate of 87.9% compared with 85% previously.
In a stock exchange filing, the REIT said the higher property operating expenses of RM5.2 million is mainly attributable to higher maintenance, marketing and advertising expenses.
The retail REIT said its quarterly gross revenue fell marginally to RM15.63 million, from RM15.68 million in 2QFY18.
Net profit for the quarter dropped 9.79% to RM7.90 million, from RM8.75 million.
The management declared an interim distribution per unit of 1.55 sen amounting to RM7.83 million, payable on Feb 14, representing a 98% distributable income.
Cumulative net profit for the first two quarters (1HFY19) fell 7.38% to RM15.16 million, from RM16.36 million a year earlier. Revenue, however, rose 0.78% to RM31.22 million, from RM30.98 million.
“I am pleased with the steady financial performance of the fund, despite the challenging retail market conditions. I am confident that the fund will continue to grow and rise, as we pursue the ideal tenant mix and focus on the leasing strategies,” Chew said.
“We will continue to undertake more asset enhancement initiatives to ensure stronger yield performance. I would also like to announce that all the assets had recently completed with the installation of solar PV system. The savings from the electricity cost will directly translate into an increase in annual net property income for the Fund in the coming years,” Chew added.
KIP REIT’s unit price closed 0.5 sen or 0.62% higher at 80 sen today, for a market capitalisation of RM406.77 million.