KUALA LUMPUR: KIP Real Estate Investment Trust (KIP REIT) announced its financial results for the third quarter ended March 31, 2023 (Q3FY2023) today.
For the quarter under review, KIP REIT delivered gross revenue of RM21.8 million, which translated to an increase of 15.9% as compared to RM18.8 million in the preceding year’s corresponding quarter. The growth in revenue was attributed to the lease income from the 3 newly acquired industrial properties and higher occupancy rate recorded from its retail segment.
Correspondingly, net property income rose by 13.3% to RM16.4 million in Q3FY2023 from RM14.5 million in Q3FY2022. The Group further reported a 15.4% year-on-year increase in profit after tax to RM10.5 million in Q3FY2023 while income available for distribution for the quarter remained steady at RM10.8 million.
The Southern region remained as the highest revenue contributor to KIP REIT, whereby the three malls located in the region reported gross revenue of RM10.3 million or 47.0% of the total revenue. In addition, the Central region’s three malls recorded revenue of RM5.8 million or 26.6%.
KIP REIT’s sole mall in the Northern region clocked in RM4.5 million or 20.5% of the total revenue.
For the cumulative nine-months period for FY2023 (9MFY2023), KIP REIT posted gross revenue of RM61.4 million, an increase of 12.6%, in comparison with RM54.5 million in the previous year’s corresponding period. The increase was largely due to 3 months of lease income from KIP REIT’s 3 newly acquired industrial properties. The profit after tax for 9MFY2023 increased by 3.4% year-on-year to RM27.5 million from RM26.5 million.
Commenting on the results, KIP REIT CEO Valerie Ong Pui Shan said, “Our community centric neighbourhood malls have shown resilience throughout economic volatility. We have recorded encouraging footfalls at our malls and posted a promising set of third quarter results. I am optimistic we will be able to close off our 2023 financial year on a strong note. KIP REIT encountered an increase in its electricity tariff billing for this quarter. However, with our increasing focus on Environmental, Social and Governance (ESG) initiatives, we managed to mitigate the impact on our financials through our solar panels which we have installed in all our malls, save for the master leased
properties. Moving forward, we are looking to further integrate ESG efforts into our business.”
On the acquisition front, she said the team is aggressively looking for opportunities in both the retail and industrial space in line with their investment policy.
“We are cognisant that the industrial sector continues to perform well and we are hopeful that we are able to expand our industrial asset base together with securing long term tenancies with the stable returns. Overall, we are focused on delivering value to our unitholders,” she added.
The Manager of KIP REIT has proposed a third interim income distribution of RM9.4 million, translating to 1.55 sen per unit, which includes a non-taxable portion of approximately 0.532 sen per unit derived from capital allowances and tax-exempt income. The book closure is fixed for May 9 and payment of the proposed income distribution will be made on May 30. Based on the closing price of RM0.905 on
April 19, the trailing twelve months’ distribution per unit gives a yield of approximately 7.24%.