KIP REIT's 3Q property income jumps 42% after acquiring AEON Mall Kinta City, pays 1.52 sen DPU

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KUALA LUMPUR (April 23): KIP Real Estate Investment Trust (KIP REIT)’s net property income rose 41.9% in the third quarter ended March 31, 2020 (3QFY20) to RM14.56 million from RM10.26 million a year ago, underpinned by higher gross revenue following the acquisition of AEON Mall Kinta City last July.

In announcing the quarterly income in a stock exchange filing today, it also attributed the higher NPI to better cost management, which resulted in 9.8% dip in property operating expenses to RM4.86 million from RM5.39 million a year ago.

The REIT’s gross revenue rose 24.12% year-on-year (y-o-y) to RM19.42 million from RM15.64 million, with RM4.1 million contributed by AEON Mall Kinta City.

However, this was partially offset by the amortisation of rental rebates of RM200,000 in accordance with reporting standards, that were given to non-essential tenants affected by the Movement Control Order (MCO) from March 18 until 31.  

Its distributable income during the quarter grew 9.6% y-o-y to RM8.24 million versus RM7.52 million a year ago.

The REIT's manager declared an interim income distribution of 1.52 sen per unit for 3QFY20, which represents a 93% income distribution rate, payable on May 29. Based on today's closing price of 79 sen, the annualised distribution yield was 7.8%, it said in a statement.

In the nine months ended March 31 (9MFY20), the REIT's net property income grew 39.6% to RM42.79 million from RM30.64 million a year ago. Distributable income inched up 3.33% to RM23.67 million from RM22.91 million previously.

KIP REIT Management Sdn Bhd managing director Datuk Chew Lak Seong said COVID-19 is an unprecedented crisis. With the MCO having been enforced since March 18, retail and food & beverages businesses have been significantly impacted, he said, adding the challenges posed by this outbreak will influence the way businesses operate in the coming months.

KIP REIT, meanwhile, will continue to monitor developments and focus on implementing appropriate measures to ensure the long-term sustainability of the REIT.

“We have strengthened the standards of hygiene and implemented social distancing measures to boost shoppers’ confidence in all our malls and also implemented measures to promote the wellbeing of our employees. The health and safety of the shoppers, employees and business partners remain as KIP REIT’s priority.

“We will continue to study the current tenant base and analyse the changing operating circumstances and challenges faced by tenants with enforced closures to develop a more reasonable leasing strategy during such trying times,” he added.

KIP REIT's units closed 1.94% or 1.5 sen higher at 79 sen today, giving it at a market capitalisation of RM399.19 million.