KUALA LUMPUR (May 9): MRCB-Quill REIT’s (MQREIT) net property income in the first quarter ended March 31, 2019 slipped 6.2% to RM32.38 million from RM34.54 million a year ago, on the back of lower revenue. 

Revenue fell 5.8% to RM41.72 million from RM44.29 million last year, despite lower property operating expenses and trust expense, its filing to Bursa Malaysia showed today.  

It did not declare any income distribution for the quarter as MQREIT noted that its distribution of income is paid on a half yearly basis.

Trust manager MRCB Quill Management Sdn Bhd's (MQM) expects some fluctuation in earnings amid the persistent challenging office market environment.  

"However, we remain optimistic that MQREIT’s operation will be able to weather these market challenges over time. We will continue to focus on tenant retention to maintain a stable occupancy and healthy weighted average lease expiry (WALE), which stands at 4.84 years as at March 31, 2019 for the REIT’s current asset portfolio," said MQM chairman Tan Sri Saw Choo Boon. 

MQREIT’s portfolio of assets boasts approximately 369,000 sq. ft., of which 19% of its total leased net lettable area is due for renewal in 2019, about 16% or 59,000 sq. ft. due in the first quarter of 2019. As at March 31, MQREIT's average occupancy rate stood at 89%.  

MQM chief executive officer Yong Su-Lin said the leases due in the first quarter of 2019 predominantly relate to the tenancies in Platinum Sentral, which have not been renewed. 

"However, we are pleased to report that new leases have been entered into for 48,000 sq. ft. of the non-renewed space in April 2019. Negotiations are progressing as scheduled for the leases due in the second and third quarter of 2019, which represent 14% and 7% respectively, of the total leases due for renewal in 2019," she added. 

Units of MQREIT closed unchanged today at RM1.10, valuing the REIT at RM1.179 billion.