UOA Real Estate Investment Trust (UOAREIT) registered 1Q24 core PATMI of RM11.7m (+12.1% QoQ, -17.8% YoY), which is below expectations, accounting for 19.9% of MSSB’s and consensus estimates.
Malacca Securities (MSSB), in its Stocks Digest note today (Mayy 6) said key deviations were mainly due to (i) lower-than-expected gross rental income and (ii) higher-than-expected operating expenses.
YoY. UOAREIT’s core PATMI was down 17.8% YoY, mainly contributed by the decline of approximately 8.5% in gross rental due to weaker occupancy rate of 57% (vs. 97% in 1Q23) in Menara UOA Bangsar following the departure of the anchor tenant, while the direct operating expenses rose 15% YoY.
QoQ. Meanwhile, despite softer gross rental income at RM26.2m (-3.3% QoQ) for 1Q24, core PATMI rose 2.5%, mainly contributed by the decline in operating expenses in 1Q24 as compared to 4Q23.
Income distribution. No income distribution declared for the current quarter.
Buildings occupancy rate. Most of the properties under UOAREIT have gained traction in terms of occupancy rate except for Menara UOA Bangsar, which has dropped significantly from 97% in 4Q23 to 57% in 1Q24.
MSSB issued a HOLD call at a share price of RM1.10 with a Target price of RM1.02.
Principally involved in the investment in real estate used for commercial purposes.
