PETALING JAYA: Sentral Real Estate Investment Trust (Sentral REIT) saw its net property income (NPI) for the first quarter ended March 31, 2023 (Q1 FY2023) drop 4% to RM29.3 million compared to RM30.5 million in the same quarter last year.
On a quarterly basis, however, the NPI was 5.1% higher compared to the RM27.8 million posted in Q4 FY2022.
Meanwhile, its earnings per unit came up to 1.65 sen, down 13% from 1.90 sen in the same quarter last year.
Quarterly revenue dipped 3.31% to RM37.5 million from RM38.8 million, owing to lower contributions from the REIT’s QB2 and Wisma Technip properties.
Finance costs incurred for Q1 FY2023 amounting to RM9.1 million were 24.8% higher compared to Q1 FY2022, mainly due to the higher Kuala Lumpur interbank offered rate (KLIBOR) in Q1 FY2023.
Property operating expenses for Q1 FY2023 on the other hand were RM8.2 million, lower by 0.6% compared to Q1 FY2022, mainly due to lower operating expenses incurred for some of the properties under the REIT’s portfolio.
As a result, its net income fell 13% to RM17.66 million or 1.65 sen per unit from RM20.36 million or 1.90 sen per unit, Sentral REIT said in a filing with Bursa Malaysia.
Sentral REIT is managed by Sentral REIT Management Sdn Bhd, which is 80%-owned by Malaysian Resources Corporation Bhd and 20%-owned by Global Jejaka Sdn Bhd.
As of Dec 31, 2022, Sentral REIT’s investment comprised nine commercial buildings with four of them located in Cyberjaya, four in Kuala Lumpur and another one in Penang.
Speaking on the group’s prospects, it was noted that approximately 162,000 sq ft or 10% of the total committed net lettable area (NLA) will be up for renewal this year, with 42% or 67,500 sq ft due for renewal in the first quarter alone.
“We are pleased to report that approximately 67,000 sq ft or 99% of leases due in Q1 FY2023 were successfully renewed,” said the group.
Sentral REIT recorded a portfolio occupancy rate of 77% in Q1 FY2023, similar to the portfolio occupancy recorded in the previous quarter.
Expecting the Klang Valley office and retail market to remain challenging, the management said it would continue to focus on asset management and leasing strategies, specifically cost optimisation and tenant retention.
“Efforts will be intensified to market the available office spaces under the portfolio with the focus on bringing in new tenants from the IT, e-commerce, serviced office and shared services sectors,” it said.
At the close of trade, Sentral REIT’s unit price fell 0.58% or 0.5 sen to 86 sen, giving it a market capitalisation of RM921.73 million.