KUALA LUMPUR (Jan 17): MRCB-Quill REIT (MQREIT) net property income in the fourth quarter ended Dec 31, 2018 (4QFY18) fell 11.7% to RM31.82 million from RM36.03 million a year ago, due to lower revenue from its portfolio.

The commercial REIT's 4QFY18 revenue fell 9.2% to RM41.81 million from RM46.05 million a year ago, its bourse filing today showed.  

For the full year ended Dec 31, 2018, MQREIT’s NPI retreated 6% to RM132.8 million from RM141.34 million the year before, as revenue declined 4.94% to RM172.57 million from RM181.5 million.

It declared a distribution per unit (DPU) for FY18 of 8.08 sen per unit, which is lower by 3.7% from 8.39 sen per unit in the previous year. "The FY2018 DPU of 8.08 sen translates to a distribution yield of 7.6% based on the closing price of RM1.06 per unit as at Dec 31, 2018," the REIT said in a statement.

The DPU includes an interim distribution of 4.23 sen that was paid to MQREIT unitholders on Sept 19 last year, and the proposed final distribution of 3.85 sen for the six-month period ended Dec 31, 2018, that is expected to be paid on Feb 28, this year.

On the outlook for 2019, MQREIT chairman Tan Sri Saw Choo Boon said he expects the office market to remain challenging.

"We will remain focused on asset management and leasing strategies that are centered on tenant retention as well as managing MQREIT’s operational cost effectively. In addition, prudent identification of right acquisition targets that meet our investment criteria will be essential to drive sustained growth going forward," he said.

In respect of 2019, MQREIT has about 19% of its leases based on net lettable areas that are up for renewal, with the bulk of the leases due after the first half of 2019.

Meanwhile, its chief executive Yong Su-Lin said the REIT has scheduled enhancement works that will be initiated for a few properties in FY19, namely Wisma Technip, Quill Building 5-IBM, Platinum Sentral and Menara Shell.

"As at Dec 31, 2018, MQREIT’s gearing ratio stood at 37.7% with 76% of its total borrowings on fixed interest rate. There will be no refinancing requirements for MQREIT in 2019 and the next refinancing will only be due in March 2020.” Yong noted.

Shares of MQREIT rose one sen or 0.9% to close at RM1.12, valuing the REIT at RM1.2 billion.