KUALA LUMPUR: Hektar Real Estate Investment Trust's (Hektar REIT) remains optimistic about maintaining its average occupancy level at 90 per cent with the help of its Tenant Support Program and momentum from Subang Parade.
Hektar REIT chief executive officer and executive director Datuk Hisham Othman said the company believed the programme would help cash flow challenges that tenants may be facing due to the sudden drop in revenue during the Movement Control Order (MCO).
A new asset enhancement via the improvement of its tenant mix from Subang Parade, meanwhile, will act as a positive catalyst to stimulate retailer activity.
"By the end of the year, Subang Parade will have completed its anchor review with an expanded MBO, a relocated Best Denki, a refurbished Parkson and a brand new premium Village Grocer.
"We expect Village Grocers to keep pulling in crowds and this store will draw the more affluent crowd away from the hypermarkets (the once popular one-stop destination to shop at," he said at the press conference after Hektar REIT's virtual annual general meeting today.
Elaborating on the tenant support programme, Hisham said it would help the majority of the 600 tenants in its six shopping centres to ease the burden from the MCO impact.
According to Hektar Reit, the overall occupancy for 2019 remained steady at 92.5 per cent, marking the 13th year of an overall occupancy rate over 90 per cent.
"Visitor traffic at Hektar Reit's portfolio remained stable at 32.3 million visits in 2019, slightly higher than the previous year."
It said rental reversions were positive in Wetex Parade with 24.8 per cent, Kulim Central with 15.6 per cent, Segamat Central with 10.6 per cent and Central Square with 9.2 per cent increase in rental reversions.
The main decline is in Subang Parade, due to initiatives in anticipation for the new supermarket anchor.
Meanwhile, Hisham said the company was in recovery mode and its priority was to ensure that its cash flow was maintained, which involves tenants being able to continue operating at its malls.
"At the same time, as more people return to malls and hopefully spend more, we can increase our tenants' sales and hence their ability to pay their rents.
"So it is survival mode plus recovery mode, if you like, for the balance of this year," he said.
Hisham said retailers' business had improved by varying levels with the easing of restrictions under the recovery movement control order (RMCO).
They expect business to pick up more in a few months when public confidence on safety and job security improves during the recovery phrase.
He viewed the footfall as a positive development, although sales at malls were still sluggish.
"Following guidelines from the Ministry of Health and Malaysia Shopping Malls Association the management has implemented measures to manage the outbreak," he added.