KUALA LUMPUR (Feb 12): Hektar Real Investment Trust's (Hektar REIT) net property income rose 12% year-on-year to RM20.91 million in the fourth quarter ended Dec 31, 2017 (4QFY17) from RM18.73 million, largely due to the REIT having acquired the 1Segamat Shopping Centre in September last year.

Revenue for 4QFY17 grew 7% y-o-y to RM33.44 million from RM31.17 million, its Bursa Malaysia filing showed. Net income for the quarter was almost flat at RM12.08 million versus RM12.01 million previously.

It declared a final income distribution of 3.3 sen per unit, to be paid on March 15, up 22% from the 2.7 sen it announced in 4QFY16. That's a payout of RM15.24 million, versus RM10.82 million in 4QFY16.

For the full FY17, however, Hektar REIT's NPI retreated a marginal 1% to RM73.74 million from RM74.34 million.

Revenue, however, rose about 1% to RM125.54 million from RM124.57 million. Net income for FY17 declined 24% to RM32.7 million from RM43.16 million.

"The overall performance was impacted by tenant remixing works at Landmark Central (now known as “Kulim Central”) due to the shopping mall’s Asset Enhancement Initiative (AEI) which was recently completed. This contributed approximately 20,000 square feet additional NLA (net lettable area)," the REIT shared in a statement.

"Tenant remixing is also being undertaken at Subang Parade, the REIT’s flagship mall, in preparation [for] its upcoming AEI. The challenging retail environment as a result of the economic uncertainties throughout 2017 also contributed to the reduction of income," it added.

It noted that footfall at Subang Parade, the REIT’s biggest income contributor showed a growth of 30% from 3Q 2017 and continued to retain its growth throughout 4Q 2017.

Meanwhile, it said turnover rent grew to 55% throughout its shopping centres, mainly at Mahkota Parade.

For 2018, Hektar REIT chief executive officer Datuk Hisham Othman said the REIT is excited with what the new year will bring.

“The purchase of 1Segamat Shopping Centre (now known as Segamat Central) in September 2017 added another great addition to Hektar REIT’s strong portfolio. The goal after the purchase of Segamat Central remains the same — to introduce the Hektar brand and best practices with the aim to be the iconic shopping centre in Segamat while enhancing the retail experience for its locals.

"The successful purchase of Segamat Central has also prompted the REIT to further its reach in identifying other prime neighbourhood-centric locations to secure its next lucrative investment,” added Hisham.