This article first appeared in The Edge Financial Daily on February 13, 2018

KUALA LUMPUR: Hektar Real Estate Investment Trust’s (Hektar REIT) net property income (NPI) 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 flat at RM12.08 million versus RM12.01 million previously.

It declared a distribution per unit of 3.3 sen, 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, Hektar REIT’s NPI retreated a marginal 1% y-o-y to RM73.74 million from RM74.34 million, though revenue rose to RM125.54 million from RM124.57 million. Net income for FY17 was down 24% y-o-y to RM32.7 million from RM43.16 million.

“The overall performance was impacted by tenant remixing works at Landmark Central (now Kulim Central) due to the shopping mall’s asset enhancement initiative (AEI) which was recently completed. This contributed approximately 20,000 sq ft in 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 in income,” it added.

Moving into 2018, Hektar REIT chief executive officer Datuk Hisham Othman said the REIT is excited about what the year will bring.