Sentral REIT sees marginal growth in 3Q net profit

by S BIRRUNTHA / pic by TMR FILE

SENTRAL REIT’s posted net profit of RM22.1 million for the third quarter ended Sept 30, 2021 (3Q21) compared to RM21.4 million posted in 3Q20.

While revenue for the quarter fell 3% to RM40.79 million from RM42.06 million previously due to lower revenue generated from its office buildings, namely Quill Building 3–BMW, Plaza Mont Kiara, Wisma Technip and Menara Shell, according to its filing to Bursa Malaysia yesterday.

The REIT’s earnings per unit rose to 2.06 sen from two sen for 3Q20.

“Despite lower revenue contribution from Sentral’s portfolio, higher realised net income for this quarter was achieved, mainly attributable to lower property operating expenses and finance cost,” it said in a separate statement.

Commenting on the results, Sentral REIT Management Sdn Bhd (SRM) CEO Yong Su-Lin (picture) said the manager’s proactive leasing efforts have kept Sentral’s portfolio occupancy at a healthy 91% as at Sept 30, 2021, resulting in the REIT’s stable performance for the quarter.

She added that in terms of lease renewals, Sentral has approximately 440,000 sq ft (22% of its total leased net lettable area) due for renewal in 2021 with the bulk of these leases due in the last quarter of 2021.

“Up to 3Q21, 198,000 sq ft of leases were due, of which approximately 81% of these leases have been successfully renewed. We are now finalising the remainder of leases due in the last quarter.

“With the reopening of the economy, we could be faced with the risk of resurgence of Covid-19 cases.

“Therefore, it is our commitment to continue to keep a close watch on the situation, reach out to tenants who are adversely impacted and be able to offer flexible and viable tenancy options as part of our tenant retention initiatives,” she said.

Meanwhile, SRM chairman Tan Sri Saw Choo Boon commented that as the national vaccination programme continues to make good headway, Sentral is looking forward for the progressive reopening of various economic sectors and also a healthy rebound in the property sector by the end of this year.

He added that although this recovery may face certain headwinds with the possibility of further resurgence of the Covid-19 pandemic, Sentral REIT will continue to manage the assets actively and be in the position to take advantage of this eventual recovery.

According to Sentral, it continues to stay disciplined and prudent in its capital management.

As at Sept 30, 2021, Sentral’s average cost of debt remained competitive at 3.55% per annum.

Lower aggregate gearing ratio of 37.1% was recorded following the early repayment of a term loan amounting to RM40 million.

Sentral’s debt maturity profile remains well-distributed with its RM260 million debt due for refinancing in December 2021 progressing as planned via the establishment of the new commercial paper and medium-term notes programmes as announced on Oct 15, 2021.