KUALA LUMPUR: Hektar Real Estate Investment Trust achieved RM24.6 million revenue for the second quarter (Q2) ended June 30, 2020, a drop of 29.2 per cent from the same quarter last year.
While the property operating expenses decreased 23.4 per cent from previous year during the quarter, the net property income (NPI) for the quarter was lower by 34.4 per cent than the preceding quarter at RM12.0 million.
The dip in revenue and NPI was due to the temporary semi-closure of the shopping centres to comply with the guidelines set by the government's Movement Control Order (MCO) which commenced on March 18 2020.
Hektar Asset Management Sdn Bhd (Hektar AM) chief executive officer Datuk Hisham Othman said ever since the MCO was implemented, visitor traffic had dropped greatly due to prohibition of large gathering and ban on leaving homes unless for essential purposes.
"The visitor count improved during the Recovery MCO period which begun on June 10 and we believe this is due to the pent-up demand from customers.
"We hope that the situation will continue to show recovery. We are playing our part to ensure shopper health and safety within our malls is taken care of, to bring back confidence to consumers.
"However, clearer results will only be seen in the next quarter. Currently we remain focused on recovery efforts including targeted sales promotions focusing on retailer sales in all of our centres," he said in a statement today.
Hektar AM is the manager for Hektar REIT.
Portfolio leasing activities were slow during the quarter due to the MCO.
However, Hektar REIT's portfolio occupancy remained steady at 90.7 per cent despite the current challenges faced by the retail industry.
Portfolio rental reversions for the quarter was 30.3 per cent higher than previous rental, albeit only seven new and renewed tenancies were completed which represented 6,356 square feet or 0.3 per cent of the total portfolio net lettable area.
Hektar REIT offered relief through Management's Tenant Support Program for qualifying tenants to ensure business continuity of the retailers and to reinforce long-term partnerships.
Operating expenses were reduced due to lower marketing activities in the centres, lower electricity usage as well as lower maintenance cost due to the partial closure during MCO.
Since the Recovery MCO started on June 10, more than 94 per cent of retailers have opened for business.
Hektar REIT's portfolio consists of mostly neighbourhood shopping centres and is a bit more resilient for this current economy with its tenancy mix focusing more on the daily items and basic necessities.
"Five out of our six shopping centres have supermarket anchors and Subang Parade will soon re-join them. We are pleased that our plans for Subang Parade are on track and that we are able to deliver our promise to our customers who have been waiting for an upscale supermarket," Hisham said.
Subang Parade's main anchor, Parkson completed part one of its plans to refurbish its department store with a modern look on the lower ground floor.
Village Grocer will open a brand new supermarket in September 2020.