Hektar Real Estate Investment Trust („Hektar REIT“) recently announced a significant increase in net income for the second quarter of the financial year 2024, ending on June 30, jumping by 42.8% to RM9.9 million. This substantial increase was driven by contributions from the performance of Yayasan Saad College and effective operational management.
During the same period, Hektar REIT reported a total income of RM36.6 million, a 34.4% increase compared to RM27.2 million in the same quarter of the previous year („Q2 FY2023“). This increase was largely attributed to the rental income recognized from the newly acquired educational asset, Yayasan Saad College („KYS“).
Supported by strong financial performance, the Management of Hektar REIT declared an interim income distribution of 1.9 sen per unit for Q2 FY2024, totaling RM13.4 million. This translates to an annual dividend yield of 6.4% based on a closing price of RM0.595 on June 28, 2024. The Income Distribution Reinvestment Plan („IDRP“) will be utilized, allowing unit holders to reinvest their dividends into new units.
Sabrina Halim, Chief Operating Officer of Hektar Asset Management Sdn. Bhd., stated that the positive results from the success of the non-retail asset acquisition marked a significant achievement in the company’s diversification strategy.
„This strategic move not only expands our portfolio but also enhances our resilience to market fluctuations. We believe that diversifying our asset base with properties that generate high-quality income will provide a more stable income stream and reduce our reliance on retail assets alone,“ she said.
Sabrina added that the company is actively exploring additional opportunities that align with long-term growth objectives, ensuring continued sustainable and attractive returns for unit holders.
She mentioned that Hektar REIT recently announced its intention to double the size of the Hektar REIT portfolio to RM3 billion by 2027. Presenting various opportunities, Hektar REIT carefully evaluates their financial feasibility, strength of income stream, growth potential, and contribution to the overall portfolio returns.
„In the quarter under review, encouraging rental returns were observed across all Hektar Shopping Centers with an overall rental return recorded at 6.4%,“ she explained.
Sabrina further elaborated that with regards to lease expiry profile, a total of 28 renewals and new leases have been secured, covering up to 3.2% of the net lettable area of the retail portfolio. Cumulatively, a total of 62 renewals and new leases representing 259,676 sq ft or 12.7% of the net lettable area of their retail portfolio have been completed to date, with other expiring leases currently in advanced negotiations, set to be finalized by the end of the year.