Stricter movement restrictions in Q3 adversely impacted Hektar REIT's mall business

KUALA LUMPUR: Hektar Asset Management Sdn Bhd, the Manager of Hektar Real Estate Investment Trust (Hektar REIT), posted revenue of RM19.1 million for the third quarter (Q3) ended 30 September 2021 (FY21), a decrease of 26.4 per cent compared to the RM26.0 million same quarter year.

The company registered a net property income (NPI) of RM10.3 million for Q3, a decrease of 20.1 per cent compared to the RM12.9 million recorded in Q3 FY20, while realised income for the quarter was 69.0 per cent lower at RM1.4 million compared to the RM4.5 million recorded in Q3 FY20.

Earnings per unit stood at 0.30 sen compared to 0.98 sen in the same quarter last year.

The dip in gross revenue and NPI compared to the previous year is due to the strict containment measures in early Q3 FY21 due to the implementation of the National Recovery Plan (NRP), with states being under Phase 1 for a prolonged period until they met specific criteria to transition to other phases.

The prolonged Covid-19 pandemic leading to the imposition of more stringent movement restrictions from May to mid-August 2021 had an adverse impact on the business in Q3.

However, Hektar REIT is now seeing more visitors to its malls with the easing of restrictions in tandem with the reopening of the economy.

Hektar REIT expects its business to recover as almost all sectors of the economy gradually are now allowed to open while allowing dine-ins and inter-state travel have also been beneficial to the REIT and other mall operators.

Further, Hektar REIT is maintaining a cautious outlook for its business given all that has happened in the past 20 months and in light of the emergence of Covid-19 variants of concern, such as the Delta-plus variant that is highly transmissible.

In line with the government's efforts to transition the country towards endemicity, the REIT will continue to prioritise the adherence to strict standard operating procedures to ensure the continued safety of visitors, tenants, vendors and employees.

Despite the rebound in economic activities, the operating landscape continues to be challenging, but the REIT is hopeful of stronger momentum in the quarters ahead.

On 15 November 2021, Hektar REIT has proposed a private placement of up to 23.098 million units representing 5 per cent of the 461.96 million total units been issued as of 12 November 2021.

The private placement, which may be implemented in either a single tranche or multiple tranches over six months from the date of approval, will be placed out to independent third-party investors.

The proceeds from the private placement will be used for working capital and capital work in progress and expenses for the private placement exercise.

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