KUALA LUMPUR (Jan 24): CapitaLand Malaysia Mall Trust (CMMT), which announced that its net property income (NPI) dropped 4.7% year-on-year for the fourth quarter ended Dec 31, 2017 (4QFY17), warns that the operating environment remains challenging moving forward.

“As more shopping malls come onstream, particularly in the Klang Valley, in 2018 and growing competition from e-commerce, the operating environment remains challenging .

“To mitigate these challenges, the manager will continue to refresh and rejuvenate the portfolio through proactive leasing strategy, active asset management and asset enhancement initiatives,” said the trust in its financial result announcement.

It expects the muted business and consumer sentiments to remain amid concerns on the rising cost of living.

CMMT announced a lower distribution per unit (DPU) of two sen compared with 2.1 sen a year ago.

According to its filing with Bursa Malaysia, its NPI was lower at RM57.57 million for 4QFY17 from RM60.43 million a year earlier, as gross revenue fell 1.6% to RM92 million.

It said the decrease in revenue was mainly due to negative rental reversions from Sungei Wang amid the closure of BB Plaza, lower rental rates and occupancy at The Mines and lower occupancy at Tropicana City Property.

“The decrease was mitigated by better performance from Gurney Plaza and the East Coast Mall on the back of higher rental rates and gross turnover rent,” it said.

DPU of two sen per unit brings its full-year distribution for FY17 to 8.22 sen, down 2.55% from 8.43 sen in FY16.

For FY17, its NPI fell 2.2% to RM237.15 million from RM242.49 million in the previous year, while gross revenue dropped 1% to RM368.93 million from RM372.62 million.

CMMT fell one sen to RM1.39 giving it a market capitalisation of RM2.85 billion.