Hektar REIT commits to 90% dividend payout in FY20


HEKTAR Real Estate Investment Trust (Hektar REIT) foresees its dividend payout for the year to be impacted due to suffering financial blows of Covid-19.

Hektar Asset Management Sdn Bhd ED and CEO Datuk Hisham Othman (picture) said the company is currently focused on recovering cashflows while committed to pay dividends to its shareholders.

“As for dividends, we are still committed to paying 90% of our distributable income in the financial year ending Dec 31, 2020 (FY20), although we are yet to see how things pan out in terms of our tenants and malls’ performance,” he told the media at a virtual press conference yesterday.

In addition, Hektar REIT has been granted temporary deferment on interest or profit payment on financing facilities by Malayan Banking Bhd (Maybank) and Maybank Islamic Bhd.

The moratorium given was on condition that no dividends be paid to unitholders until full settlement of deferred interest or profit payment on financing facilities.

Last year, Hektar REIT paid the lowest dividend since listing in 2006 of a total 7.77 sen.

The trust’s dividend yield for FY19 was 7.85%, which is higher compared to 5.45% Employees Provident Fund dividend or 3.47% of FTSE Bursa Malaysia-Kuala Lumpur Composite Index yield.

The REIT has introduced a Tenant Support Programme to assist the majority of the 600 tenants in its six shopping centres including Subang Parade in Selangor,

Mahkota Parade (Melaka), Wetex Parade (Johor), Central Square and Kulim Central (Kedah) and Segamat Central (Johor).

Most of the amount will go towards direct benefits in the form of calibrated rental rebates to tenants among other measures.

Hisham said the retail market will rebound as Hektar REIT has been seeing an increase in footfalls since the recovery of the Movement Control Order (MCO).

“People will still go out although they will be cautious about spending. What we want to see is the increase in footfalls which is actually happening,” he said.

In 2019, visitor traffic at Hektar REIT’s portfolio remained stable at 32.3 million visits while overall occupancy remained steady at 92.5%.

Meanwhile, Subang Parade will welcome Village Grocer in the third quarter of 2020.

Its tenant, Parkson, is also committed to refurbishing the department store by the second half of 2020.

Hisham said the manager is in negotiation to acquire another neighbourhood mall.

“We will disclose it when the time comes. Our criterion is malls outside of Klang Valley where there is not much competition, with accretive yield,” he said.