KIP Real Estate Investment Trust reported a 5.0% increase in profit after taxation (“PAT”) to RM8.8 million for its first quarter ended 30 September 2022 from RM8.4 million in Q1FY2022.
The increased bottom line grew in tandem with the Q1FY2023 net property income which rose to RM14.3 million on gross revenue of RM19.3 million. Year on year, gross revenue grew by 12.9%, due to a lower base revenue in the previous corresponding quarter as a result of reduced promotional area income on the back of restriction on activities due to FMCO. The income available for distribution for the quarter was 7.4% higher at RM9.1 million due to the improved PAT.
Commenting on the results, KIP REIT Management Berhad executive director Dato’ Eric Ong Kook Liong, said, “Our core strategy going forward will be to continue to pursue high quality accretive acquisitions to support our sustainable distribution per unit pay-out to our unitholders.
We remain cautiously optimistic of our prospects in line with the economic recovery as market uncertainties continue to loom. We are also cognisant of the challenges that lie ahead such as rising interest rates and inflationary pressures, however, we will continue to actively monitor the situation and take proactive measures to sustain our business performance moving forward.
Furthermore, we are pleased to announce that following our unitholder meeting, we have obtained the unitholders’ approval for the acquisition of three industrial assets in Port Klang. This marks KIP REIT’s maiden acquisition of industrial properties as an asset class, which is part of our diversification plans. That said, we remain committed on focusing on our core strengths in the management of KIP REIT’s retail assets.”
The Manager of KIP REIT has proposed a first income distribution of RM8.4 million, translating to 1.45 sen per unit, which includes a non-taxable portion of approximately 0.06 sen per unit derived from capital allowances and tax-exempt income which are not subject to tax. The book closure is fixed for 10 November 2022 and payment of the proposed income distribution will be made on 23 November 2022. Based on the closing price of RM 0.895 on 26 October 2022, the trailing twelve months distribution per unit gives a yield of approximately 7.49%.
Earlier this month, KIP REIT announced the approval for the sale and acquisition of three industrial properties located in Pulau Indah, Selangor, between the Trustee of KIP REIT and Hextar Chemicals Sdn Bhd, Hextar Industrial Chemicals Sdn Bhd and Teju Logistics Sdn Bhd (collectively referred to as “Hextar Group of Companies”) for an aggregate purchase price of RM78.7 million. Upon completion of the acquisitions, these properties will be leased to Hextar Group of Companies for a period of 15 years.
