Lower Rentals Impacts CapitaLand’s 2021 Income

CapitaLand Malaysia REIT Management Sdn. Bhd. announced its net property income (NPI) of RM33.2 million for Quarter 4 which is from October to December 2021, the mall owner recorded a marginally lower income of RM34 million.

For the financial year 2021, the group’s NPI was at RM103.1 million, 22.7% lower compared to 2020. According to CapitaLand, this lower NPI was mainly due to lower gross revenue of RM224 million compared to RM261 million it collected the previous year. The lower contribution was due to reduced occupancy and negative rental reversions.

As of the end of 2021, independent valuers appraised the group’s investment properties at RM3.8 billion, a marginal decrease from RM3.9 billion a year ago.

Mr Lui Chong Chee, Chairman of CMRM, added that the FY 2021 financial performance reflected the challenges that continued to afflict Malaysia’s retail sector during the second year of COVID-19. He said while there were promising signs of a retail recovery in 4Q 2021, the recent emergence of new virus variants has cast a shadow over the economic recovery.

Moving forward, CapitaLand will stay vigilant and focus on enhancing the operational stability of its portfolio, while remaining on an active lookout for inorganic growth opportunities. Given the economic uncertainties, the group will approach all potential acquisitions, in existing and new asset classes, with discipline.

As part of its ongoing efforts to strengthen its financial position and liquidity, the group had completed several initiatives in 4Q 2021 to reduce financing costs and lower refinancing risks. Including refixing the coupon rate of the RM300 million unrated and secured Medium Term Notes at a lower rate for the remaining tenure of 1.5 years, and extending the tenure of an existing secured term loan for another five years.

In view of the continuing headwinds, the group is adopting a cautious outlook for the near term.

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