Hektar Asset Management Sdn. Bhd., the Manager of Hektar Real Estate Investment Trust (Hektar REIT), has announced impressive financial results for the second quarter of the financial year ending 30 June 2024 (Q2 FY2024). The company's performance was bolstered by new revenue streams from Kolej Yayasan Saad (KYS) and effective operational management.
In Q2 FY2024, Hektar REIT reported a total revenue of RM36.6 million, marking a significant 34.4% increase compared to the RM27.2 million recorded in the same quarter of the previous year (Q2 FY2023). This growth was largely driven by rental income from the recently acquired education asset, KYS. Net Property Income (NPI) rose by 33.7% to RM20.7 million, while Net Realised Income saw a remarkable 42.8% increase, reaching RM9.9 million in Q2 FY2024.
The quarter also witnessed a positive rental reversion rate across all Hektar Malls, with an overall reversion rate of 6.4%. The company secured a total of 28 renewals and new tenancies, representing 3.2% of the portfolio's net lettable area. To date, 62 renewals and new tenancies have been completed, covering 259,676 square feet, or 12.7% of the retail portfolio's net lettable area.
Reflecting its robust financial performance, Hektar REIT declared an interim income distribution of 1.9 sen per unit for Q2 FY2024, amounting to RM13.4 million. This corresponds to an annualised dividend yield of 6.4%, based on the closing price of RM0.595 on 28 June 2024. The Income Distribution Reinvestment Plan (IDRP) will be available, allowing unitholders to reinvest their dividends into new units.
As of Q2 FY2024, Hektar Malls maintained an overall occupancy rate of 87.2%, with the secured occupancy rate rising to 89.3% as new tenants prepare to open in the coming quarters. These encouraging figures are attributed to Hektar REIT's enhanced leasing strategies, ongoing Asset Enhancement Initiatives (AEI), and a positive retail industry outlook for the remainder of 2024.
The Manager's focus on Subang Parade's repositioning continues, with Urban Agenda Design Sdn. Bhd. appointed as the lead architect for the rejuvenation project. This initiative, set to be implemented over three years, aims to enhance both the interior and exterior of Subang Parade. The project is currently in the detailed design stage, with on-site work expected to commence by Q1 2025.
Commenting on the results, Sabrina Halim, Chief Operating Officer of Hektar Asset Management Sdn. Bhd., stated, "The positive results derived from the successful acquisition of our first non-retail asset marks a significant milestone in our diversification strategy. This strategic move not only broadens our portfolio but also enhances our resilience against market fluctuations."
Looking ahead, Hektar REIT is exploring further opportunities that align with its long-term growth objectives, with the aim of doubling its portfolio size to RM3 billion by 2027. The Manager is evaluating prospects for financial feasibility, income stream strength, and growth potential, with a focus on retail, education, and light industrial properties.
As Hektar REIT continues to enhance its asset portfolio and implement prudent capital management practices, it is well-positioned to deliver sustainable and attractive returns to its unitholders in an increasingly competitive market environment.