KUALA LUMPUR, 9 APRIL 2021 – Hektar Asset Management Sdn Bhd, the Manager for Hektar Real Estate Investment Trust (“Hektar REIT”) held its Ninth Annual General Meeting for investors today.
Hektar REIT posted revenue of RM111.1 million for the Financial Year ended 31 December 2020 (“FY20”), a decline of 18.9% compared to the same period of the previous year as the rental, car park and food court income decreased due to the challenges from the COVID-19 pandemic and the various mobility restrictions imposed throughout the year to curb the spread of the virus. Property Operating Expenses for FY20 declined by RM3.5 million or savings of 5.7% compared to the corresponding period of the previous year, while Net Property Income was reported at RM53.0 million, a decline of 29.8% from FY19.
Dato’ Hisham bin Othman, Chief Executive Officer of the REIT Manager, commented: “2020 has been an extraordinarily challenging year due to the pandemic, but we expect the retail sector to regain some of the ground it had lost in the past year as consumer sentiment recovers on the back of stronger economic growth and the rollout of the COVID-19 vaccine.”
“We remain cautious for 2021 as the situation is still evolving. However, we are beginning to see traffic returning to shopping malls, including ours, since the lifting of mobility restrictions as pent-up demand for shopping, dining and entertainment is unleashed. We will continue to support our tenants and prioritize measures to ensure the safety and health of our employees, shoppers, tenants and vendors as a responsible business in the communities where we are located.”
The COVID-19 pandemic has impacted the retail industry significantly and the REIT has also not been spared. However, we remain committed to steering our portfolio into recovery this year. Hektar REIT declared an income distribution of RM4.2 million, which is equivalent to 0.9 sen per unit, for the fourth quarter ended 31 December 2020 (“4Q2020”).
Portfolio Resilience – Positive Anchor Tenant Support
Hektar REIT saw a slight decline in overall occupancy rate to 88.4% for FY20, compared to the overall occupancy rate of 92.5% in FY19 as the pandemic took its toll on the retail sector. However, despite the decline, the overall portfolio registered 80 new and renewed tenancies representing Net Lettable Area (“NLA”) of 64,014 sq ft or 17.8% of total NLA as Hektar reached out to eligible tenants by providing them with support through rental assistance and engaged with shoppers in the respective malls to help boost tenant sales through physical and digital platforms.
Notably, Hektar REIT’s two largest malls, Subang Parade and Mahkota Parade, saw reaffirmed commitments from its long-term anchor tenant, Parkson as they refurbished its lower ground space at Subang Parade and also renewed its tenancy at Mahkota Parade. Subang Parade also saw the entry of new anchor tenants i.e. premium supermarket Village Grocer in 3Q2020 and EcoShop in 4Q2020. Despite the negative impact of the pandemic on the retail sector, the entry of new anchor tenants is a testament to the confidence of these retail operators in the long-term prospects of these malls.
Sustainability Efforts
Hektar REIT is committed to fulfill its obligation to ensure that all the business activities are performed to high standards of Environmental, Social and Governance (ESG). Overall, energy consumption for the portfolio declined by 19.1%, translating into a reduction of carbon emissions of 1.2 million kgCO2. Hektar REIT is a constituent member of the FTSE4Good Bursa Malaysia Index and in its latest December 2020 evaluation, its ESG conduct has been recognized with a 3-star ESG rating by FTSE Russell.
Commitment to Safety and Health
Hektar is cognisant that the COVID-19 pandemic will continue to be a key factor in safety and health standard operating procedures (“SOPs”) for some time to come. Hektar is committed to ensuring that all health and safety SOPs are followed based on the guidelines from the Ministry of Health and will continue to prioritize the safety and health of all employees, shoppers, tenants and vendors.
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