KUALA LUMPUR (Nov 14): UOA REIT (KL:UOAREIT) saw its net rental income fall 12.6% to RM18.66 million in its third quarter ended Sept 30, 2024 (3QFY2024), from RM21.34 million a year ago, as gross rental dropped on the departure of an anchor tenant, while operating expenses climbed.

Property operating expenses rose 25.4% to RM9.11 million in 3QFY2024, from RM7.27 million in 3QFY2023, as one of its properties underwent upgrading works, which led to an increased contribution to the sinking fund.

Gross rental fell 2.9% to RM27.77 million from RM28.61 million, its bourse filing showed.

Its net profit declined 24.6% to RM10.47 million in 3QFY2024 against RM13.89 million a year ago.

No income distribution was declared for the quarter.

As of Sept 30, 2024, net asset value per unit of the REIT, which mainly manages commercial properties, stands at RM1.4331.

For the first nine months of FY2024 (9MFY2024), UOA REIT’s net rental income dropped 15.5% to RM53.62 million from RM63.49 million in 9MFY2023, while gross rental declined 4.8% to RM81.58 million from RM85.72 million.

Net profit for the period fell 28.8% to RM30.24 million from RM42.47 million in 9MFY2023.

On prospects, UOA REIT said the office market continues to face challenges from rising business costs and influx of new office buildings, which resulted in a more competitive landscape.

“While market dynamics appear to be stabilising and rental rates have remained largely consistent, we remain cautiously optimistic about the outlook, anticipating a gradual improvement in occupancy levels as leasing activity progresses,” it added.

UOA REIT's unit price closed unchanged at 99 sen on Thursday, valuing the group at RM668.84 million. Year-to-date, the counter has fallen 10%.