IGB REIT net property income inches up 2.4% in 3Q on higher rental income

This article first appeared in The Edge Financial Daily, on October 25, 2018.
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KUALA LUMPUR: IGB Real Estate Investment Trust’s (REIT) net property income (NPI) rose a marginal 2.4% to RM96.6 million in its third quarter ended Sept 30, 2018 from a year ago on higher rental income.

Revenue increased 3.2% year-on-year (y-o-y) to RM133.7 million as rental income grew 4.2% to RM105.9 million.

In a bourse filing yesterday, it announced an income distribution of 95% of its distributable income for 3QFY18 amounting to RM81 milllion or 2.29 sen per unit, to be paid on Nov 29.

For the cumulative nine months, REIT NPI increased by 4.1% to RM289.8 million from RM278.4 million in 9MFY18. Distributable income for the period totalled RM256.5 million or 6.91 sen per unit, consisting mainly of realised profit of RM228.2 million and adjusted distributable income of some RM28 million.

IGB REIT said notwithstanding a lower forecast of retail sales growth, the REIT’s manager (IGB REIT Management Sdn Bhd) will continue to strengthen its performance by improving customer and shopper experience in both the Mid Valley Megamall and The Gardens Mall.

The manager will also proactively explore asset enhancement initiatives and ensure that the tenancy mix is responsive to meeting the evolving demands and changing preferences of customers and shoppers. “These are expected to translate to a better performance to enable IGB REIT to maintain a stable flow of distributable income, and create long-term value for its unitholders.”

IGB REIT yesterday rose one sen or 0.59% to close at 70 sen, valuing the REIT at RM6 billion. Some 2.69 million shares were traded.