KUALA LUMPUR (May 9): Sentral REIT (KL:SENTRAL) kicked off 2025 with a 4.4% year-on-year decline in net property income as reduced revenue offset lower operating expenses in the first quarter.

Net property income for the three months ended March 31, 2025 (1QFY2025) was RM36.5 million, or 1.64 sen per share, Sentral REIT said in an exchange filing. Lower property operating expenses softened a 2% year-on-year decline in revenue to RM47.1 million.

The real estate investment trust, which mainly manages commercial properties, blamed the lower income on reduced revenue from Menara Shell and Sentral Building 3, along with accounting adjustments under the Malaysian Financial Reporting Standard 16.

No distribution was announced. The trust’s policy is for semi-annual distribution, typically in January and August.

Looking ahead, Sentral REIT reiterated its plan to diversify its asset base across the office, retail, industrial, education, and healthcare segments to mitigate sector-specific risks, strengthen property income streams, and enhance long-term portfolio growth.

The REIT will also continue exploring divestment options, said chief executive officer Derek Teh Wan Wei in a separate statement. He did not provide details.

During the first quarter, Sentral REIT managed to renew 85% of the leases expiring in the first quarter of 2025. The REIT has about 460,000 square feet, or 21% of the total lettable space, due for renewal in 2025, including 20,000 square feet in the first quarter.

The average occupancy rate was 84% with a weighted average lease term to expiry at 4.74 years. “Early negotiations for upcoming lease renewals and advanced marketing of vacant spaces are already in progress,” Teh added.

At Friday's midday trading break, Sentral REIT's units paused at 77 sen, up half a sen or 0.7%, giving the trust a market capitalisation of RM921 million ahead of the results announcement.