KUALA LUMPUR (Oct 25): Capitaland Malaysia Mall Trust’s (CMMT) distribution per unit (DPU) fell 2.3% to 2.08 sen for the third quarter ended Sept 30, 2017, from 2.13 sen a year ago.
 
CMMT said the lower distribution was due to lower net property income (NPI), which declined 2.2% to RM60.1 million, from RM61.43 million, due to higher operating expenses.
 
In a filing to Bursa Malaysia, the group said the higher operating expenses was mainly due to the increase in service charge at Sungei Wang Plaza, higher property maintenance and higher utilities consumption.
 
CMMT added poor performance at its other malls in the Klang Valley — Tropicana City Mall and The Mines — had also contributed to the drop in the NPI, which was offset by better performance from the Gurney Plaza in Penang and East Coast Mall in Kuantan.
 
As for its financial position, CMMT said its borrowings stood at RM1.33 billion, equivalent to a gearing ratio of 32.8%.
 
“During the quarter, CMMT converted a floating rate term loan of RM128.7 million to a 3-year fixed rate term loan,” it added.
 
Across the board, CMMT said it has managed to maintain its occupancy rate at 95.8%.
 
However, the shopper traffic at its malls has declined by 3.59% to 14.92 million in the third quarter, from 14.4 million a year ago.
 
For the cumulative first nine months of the year, CMMT said DPU declined 1.7% to 6.22 sen, from 6.33 a year ago, on declining NPI, which fell 1.4% to RM179.57 million, from RM182.07 million previously.
 
Going forward, CMMT said it expects both the consumer and business sentiments to remain cautious for the remaining part of the year.
 
“As more shopping malls are expected to open towards the year-end, particularly in the Klang Valley, the operating environment is expected to remain challenging,” it said.
 
Despite challenging operating conditions, CMMT is confident that the underlying strength of its portfolio of quality assets located in key urban centres across Malaysia will continue to offer sustainable returns to unitholder.
 
“To mitigate these challenges, the manager will continue to undertake proactive retail and asset management initiatives and introduce new offerings in CMMT’s malls to cater to the changing needs of shoppers,” it added.
 
Shares in CMMT were barely traded and closed unchanged at RM1.46 today, valuing the group at RM2.98 billion.