KLCCP gears up for recovery in 2022

by FAYYADH JAAFAR / pic by TMR FILE

KLCC Property Stapled Group (KLCCP) expects to make a sustained recovery in its business segments after the country’s transition to the endemic phase and the economy reviving and international borders reopening.

The commercial property arm of national oil company, Petroliam Nasional Bhd, posted a 15% year-on-year increase in earnings to RM495.9 million for the financial year ended Dec 31, 2021, which was anchored by the stable office segment, with full occupancy and long-term leases.

Compared to the year 2020, the group’s distribution to stapled security holders increased by 12%, amounting to a full-year dividend payment of 33.6 sen per stapled security.

The group’s CEO Md Shah Mahmood said 2021 was a year the group focussed on stakeholders while 2022 will see sustained recovery in its business prospects.

“We will continue to support the group’s tenants and customers’ safety and wellness, and retail partners’ survivability.”

In addition, we will leverage the group’s customer experience to drive the group’s business,” he said after its AGM in Kuala Lumpur yesterday.

Although the year saw fewer operational days from the various lockdowns and movement restrictions that impacted KLCCP’s retail and hotel segments, both these segments saw a pick-up in momentum towards the final quarter of the year, capping the year with their best performance in December 2021.

Since October 2021, there has been an upward trend in the occupancy rate of the hotel and retail segments. The office sector remains the group’s largest contributor to its earnings, contributing 49% of its total revenue.

The group expects to see progressive recovery in its commercial office space business this year judging from the return of office tenants from November 2021 onwards.

“For the retail and hotel sectors, the group will focus on enhancing the customer experience to attract more local visitors and tourists to the mall (Suria KLCC),”

We have also been actively looking into the potential of the vacant land on the property, nicknamed “D1”. It currently serves as a parking area. We are not planning to develop the land at this point in time. We are still in the process of evaluating the land,” said Md Shah, adding the group will continue to explore opportunities to maximise the value of its assets.

KLCCP’s strategy and sustainability division will orchestrate the group’s efforts in achieving its sustainability objectives and in driving its climate change agenda.

“With the fast pick-up in the economy, we are confident this will further drive recovery, particularly for our retail and hotel segments.”

“The positive outlook on the real estate investment trusts, and market trends will further support our strategic agenda as we re-evaluate our existing portfolio of assets and explore new potential quality assets to position for growth and build on the momentum for a brighter year ahead,” he said.

KLCCP shares ended one sen lower at RM6.64 yesterday, giving it a market capitalisation of RM11.99 billion.