MQREIT records lower Q4 net profit

PETALING JAYA: MRCB-Quill REIT’s (MQREIT) net profit for the fourth quarter ended Dec 31, 2016 fell 18.75% to RM13.30 million from RM16.38 million a year ago due to higher expenses and costs as well as lower net property income.
In a filing with Bursa Malaysia yesterday, MQREIT said property operating expenses were higher by 46.1% due to higher repairs and maintenance costs incurred during the quarter. It also incurred finance costs of RM9.10 million and manager’s fee of RM2.47 million during the quarter.
Revenue for the quarter rose 3.28% to RM38.93 million from RM37.69 million a year ago due to additional revenue from Menara Shell, higher rental income due to step up rent adjustments from Quill Building 2-HSBC, Quill Building 3-BMW and Wisma Technip.
For financial year ended Dec 31, 2016 (FY16), net profit rose 9.51% to RM59.16 million from RM54.02 million a year ago. Overall, the realised net property income rose 13.3% to RM102.3 million although property operating expenses were higher by 18.4% due to the acquisition of Menara Shell and Platinum Sentral.
Revenue for the year rose 13.60% to RM136.65 million from RM120.29 million a year ago.
MQREIT expects the office market to remain challenging with the slowdown of the global and domestic economies and low crude oil prices. Despite the dampened take-up rates in the Klang Valley, it is confident that its tenant retention strategies will ensure that performance remains stable this year.
In 2016, 87% of the 7% of the total net lettable area (NLA) due for renewal has been renewed. In 2017, 14% of the total NLA are due for renewal and negotiations for renewal have already commenced.
MQREIT’s asset portfolio size as at Dec 31, 2016 stood at RM2.22 billion. Its average occupancy rate for FY16 stood at 98% in terms of NLA.