KUALA LUMPUR (Jan 23): Maintenance and upgrading works led to a decline in net property income (NPI) for IGB Real Estate Investment Trust (REIT) (KL:IGBREIT) and IGB Commercial REIT (KL:IGBCR) in their fourth quarter ended Dec 31, 2024 (4QFY2024). Property developer IGB Bhd is the sponsor of both trusts, holding 47.95% in IGB REIT and 50.01% in IGB Commercial REIT.

IGB REIT, which focuses on retail properties, with key assets being Mid Valley Megamall and The Gardens Mall, reported that its NPI for 4QFY2024 fell 6.4% to RM107.88 million from RM115.24 million in the same period last year. Revenue was largely unchanged at RM158.3 million during the quarter under review, versus RM158.47 million previously.

The lower quarterly NPI was primarily due to maintenance costs for mechanical and electrical equipment, upgrading and restoration works, and marketing expenses incurred in the quarter, the REIT said in its bourse filing.

Its distributable income for 4QFY2024 amounted to RM92.5 million — derived from a profit of RM88.5 million plus non-cash adjustments mainly from a net fair value change of RM233.5 million, minus a management fee of RM6.7 million and distribution adjustment of RM226.54 million, payable in units. This compares to RM99.81 million in 4QFY2023.

The REIT's distribution per unit (DPU) dipped to 2.5 sen from 2.7 sen in the same period last year. This brings total DPU for the full FY2024 to 10.7 sen, compared to 10.47 sen in FY2023.
 
For FY2024, IGB REIT’s NPI increased by 1.7% to RM455.71 million from RM447.88 million a year earlier, while revenue grew 3.6% to RM626.1 million from RM604.31 million.

Meanwhile, despite posting a higher revenue, IGB Commercial REIT (KL:IGBCR) reported a lower net property income (NPI), attributed to the timing difference of the budgeted expenditure for asset enhancement initiatives (AEIs) and repair works. The REIT largely focuses on office buildings, such as Menara IGB, GTower and Menara Tan & Tan.

For its 4QFY2024, the IGB Commercial REIT’s NPI fell 14.2% to RM28.19 million from RM32.86 million in 4QFY2023, which led its distributable income for 4QFY2024 to fall 14.7% to RM18.41 million. 

Revenue for the quarter grew 5.7% to RM60.19 million from RM56.92 million, lifted by higher occupancy and rental rates.

IGB Commercial REIT declared a distribution per unit (DPU) of 0.75 sen for the quarter under review — to be paid on Feb 28 — bringing total DPU for FY2024 to 3.62 sen, up from 3.49 sen previously.

For the full year, IGB Commercial REIT recorded an NPI of RM130.53 million, while revenue totalled RM230.98 million.

Looking ahead, IGB REIT said it has completed the South Court reconfiguration in Mid Valley Megamall, creating a more diverse tenant base. It added that it remains steadfast in its commitment to delivering long-term value to stakeholders through ongoing AEIs, tenancy mix management, and sustainability-linked improvements.

Meanwhile, IGB Commercial REIT said its rigorous approach to property enhancement has led to a notable rise in its portfolio occupancy rate to 87.5% in 2024 from 81.3% a year ago. Its maiden acquisition of two additional office floors in Menara Southpoint has increased the REIT’s property value to RM3.2 billion.

Looking ahead, IGB Commercial REIT said it remains committed to exploring and pursuing new market opportunities and expanding its service offerings.

Shares of IGB REIT closed unchanged at RM2.19 on Thursday, giving the REIT a market capitalisation of RM7.92 billion. IGB Commercial REIT finished unchanged at 56.5 sen, valuing it at RM1.36 billion.