KUALA LUMPUR (June 29): Hektar Real Estate Investment Trust (REIT) said it is in “survival plus recovery” mode for the rest of the financial year ending Dec 31, 2020 (FY20) as the group contends with the impact of Malaysia's movement control order (MCO) to curb the Covid-19 pandemic.
Hektar Asset Management Sdn Bhd executive director and chief executive officer Datuk Hisham Othman, speaking on behalf of the REIT's manager, said the REIT’s priority is to ensure that its cash flow is maintained, which involves tenants being able to continue operating at its malls.
“At the same time, as more people return to malls and hopefully spend more, we can increase our tenants' sales and hence their ability to pay their rents. So it is survival mode plus recovery mode, if you like, for the balance of this year,” Hisham said during a press conference held after Hektar REIT's virtual annual general meeting today.
According to Hektar REIT’s website, its portfolio comprises six established neighbourhood-focused shopping centres across Peninsular Malaysia.
Hektar REIT owns the Subang Parade shopping mall in Selangor and Mahkota Parade in Melaka.
In Johor, Hektar REIT owns Wetex Parade and Segamat Central, while its Kedah portfolio comprises Central Square and Kulim Central.
When asked if Hektar REIT will lower its income distribution to unitholders in FY20, Hisham said the REIT is still committed to paying 90% of its distributable income.
That said, Hektar REIT will not be paying any dividends to unitholders until the full settlement of the group's deferred interest and profit payment on financing facilities, according to him.
Hektar Asset Management executive director and chief corporate officer Zarina Halim, who was also present at the press conference, said that while Hektar REIT is eyeing a mall as a potential acquisition target, such a purchase will have to fulfil the REIT's strict criteria.
“We would not be in a hurry to acquire if the price is not right. The purchase price is very important because the acquisition has to be yield-accretive. So, although there is an interesting potential [acquisition], we will only seal the deal if the price is right, the environment is right and make the necessary announcements should the deal materialises,” Zarina explained.
On asset disposals, Zarina said Hektar REIT will evaluate serious proposals that come its way.
On whether Hektar REIT plans to diversify into non-retail assets, she said the group had “internally brainstormed” such a move and will possibly look at the idea again in the future.
However, for now, she said the REIT is still very much committed to retail assets, noting that there is still an underserved market within the retail industry in Malaysia.
On Bursa Malaysia today, Hektar REIT's unit price closed unchanged at 65.5 sen at 5pm with a market capitalisation of RM302.58 million.
Hektar REIT's latest reported net assets per share stood at RM1.31.