MRCB-Quill REIT Q2 earnings up 16%

14 Aug 2020 / 15:21 H.

PETALING JAYA: MRCB-Quill REIT’s (MQREIT) net profit for the second quarter ended June 30, 2020 improved by 16.0% to RM19.08 million from RM16.46 million a year ago largely due to higher income contribution from Platinum Sentral, Menara Shell & Tesco Penang after incorporated rental rebates that have already been provided for retail SME tenants predominantly in Plaza Mont Kiara.

During the period, lower property operating expenses and finance cost were also recorded. Its revenue was up 3.7% to RM40.63 million against RM39.19 million in the same quarter last year.

For the six months period, its net profit increased 8.4% to RM38.87 million from RM35.86 million, while revenue was up 2.4% to RM82.84 million from RM80.91 million.

MQREIT declared a distribution income and distribution per unit (DPU) of RM36.76 million and 3.43 sen, respectively for H1’20. The annualised H1’20 DPU translates to a yield of 9.33% based on MQREIT’s closing price of 73.5 sen on June 30, 2020.

MRCB Quill Management Sdn Bhd (MQM) chairman Tan Sri Saw Choo Boon said the performance of the economy in the first half of the year had deteriorated, but it is seeing gradual recovery following the government’s introduction of economic stimulus package and easing of the country’s “movement control” measures.

MQM is the manager of MQREIT.

“MQREIT’s tenants have progressively returned to their offices since the commencement of the recovery movement control order (RMCO) on June 9, 2020. Notwithstanding the relaxation of Covid-19 regulations, we are continuing our stringent preventive measures to ensure a clean and safe workspace for all our tenants while prudently managing MQREIT’s property operating expenses.”

MQM CEO Yong Su-Lin is confident that the trust will ride out this down cycle with its continued focus on cost management, tenant retention and optimisation of rental contribution. MQREIT’s Q2’20 results as compared to Q1’20 results reflected the impact of its prior year’s tenant mix repositioning and the rental rebates for certain SME tenants amid Covid-19. Retaining and supporting tenants through the

Covid-19 challenges remains its priority.

“As at June 30, 2020, MQREIT’s average portfolio occupancy was stable at 90.4%. Due to the MCO, leasing activates were relatively muted in Q2’20 and renewals for the year are concentrated in the last quarter. Negotiations are progressing as scheduled for the balance of leases expiring in second half of 2020 which represent 90% of the total leases due for renewal in 2020.

“We have been engaging with key strategic tenants on lease renewals well ahead of lease expiry in anticipation of early lease renewals for some of these leases. Since the RMCO, MQREIT has progressively stepped up its marketing efforts to find new tenants for the remaining 9.6% vacant space while adhering to the RMCO SOP guidelines.”

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