KIP REIT Management Sdn Bhd (KIPRM), the manager of KIP Real Estate Investment Trust (KIP REIT) says it will monitor and assess the situation concerning Covid-19 and try to minimise the adverse risk this outbreak may have on the operating and financial performance of its business.
KIP REIT is the first community-centric retail REIT listed on Bursa Malaysia. It has a portfolio of seven properties with a total asset value of RM852.3 million.
It has six KIPMalls located in Bangi, Tampoi, Kota Tinggi, Masai, Senawang, Melaka, and AEON Mall Kinta City (AMKC) in Ipoh. The properties have a total net lettable area of about 1.48 million square feet.
KIPRM managing director Datuk Chew Lak Seong said the movement control order (MCO) enforced since 18 March to minimise the spread of the virus has significantly impacted retail and food & beverage businesses.
"The challenges posed by this outbreak will influence the way businesses operate in the coming months," he said.
KIP REIT's net property income (NPI) for the third quarter ended 31 March 2020 was RM14.6 million, an increase of RM4.3 million, or 41.9 per cent year-on-year (y-o-y).
In a filing with Bursa, it said the NPI growth was underpinned by higher gross revenue where AMKC contributed RM4.1 million and a 9.8 per cent dip in property operating expenses, y-o-y, to RM4.8 million due to better cost management.
Net profit for the quarter was RM9.1 million, 23.6 per cent higher y-o-y.
"KIP REIT delivered another quarter of strong results, underpinned by the eight months' contribution from AMKC which was acquired in July 2019, and overall better cost management," said Chew.
For the nine months ended March 31, 2020, KIP REIT's gross revenue grew by 23 per cent y-o-y, to RM57.6 million while the NPI increased by 39.6 per cent to RM42.8 million. Net profit surged by 63.8 per cent to RM36.9 million.
Chew said that KIP REIT will continue to monitor developments and focus on implementing appropriate measures to ensure the long-term sustainability of the fund.
"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.
"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 said.