Hektar-REIT to pay 2.5 sen dividend for Q

Hektar-REIT to pay 2.5 sen dividend for Q

By DANNY YAP

PETALING JAYA: Hektar-REIT will declare a 2.5 sen a share dividend for its fiscal first quarter ended March 31.

Hektar Asset Management Sdn Bhd chairman and chief executive officer Datuk Jaafar Abdul Hamid said the company had a quarterly dividend distribution policy in line with international best practices for real estate investment trusts (REITs).

Hektar Asset Management is the manager of Hektar-REIT, a retail mall property trust.

Jaafar said the quarterly dividend distribution policy was aimed at encouraging greater foreign and local investor participation in Hektar-REIT.

“We want to reward investors for their support and patience,” he told StarBiz yesterday.

In Hektar-REIT’s prospectus, the company pledged to offer total dividends of 9.6 sen a share or 90% of the actual net income for the year ending Dec 31, 2007 whichever was higher.

Jaafar said Hektar-REIT was honouring its pledge. “We are confident of delivering on the dividend payout because of our strong management and execution,” he said.

For the first quarter, Hektar-REIT achieved revenue of RM23.6mil, or 2.8% above expectation.

“The improved revenue was attributed to an increase in exhibition income, casual leasing and carpark fees. We also managed to reduce operating expenses by RM8.7mil through more efficient property maintenance and marketing,” Jaafar said.

He also said the first-quarter net profit was RM11.2mil higher than forecast owing to an increase in net property income and reduction in interest expenses.

The company secured a variable rate finance of 4.7%, which was lower than the 5.8% interest expected on its RM184mil borrowings.

Jaafar said due to the company’s prudent management of finances, Hektar-REIT’s earnings per unit now stood at 3.5 sen with RM1.04 net asset value after the provision of RM7.6mil dividend payout.

Going forward, he said, the management company was studying 10 shopping centres, three of which were in the due diligence phase.

“We plan to inject another property into the REIT by year's end,” Jaafar said, adding that it was on the lookout for old, “tired” shopping centres, ranging from neighbourhood to regional malls that could be revitalised through capital injection and good management.

Hektar-REIT has about 80 million sq ft of net lettable area (NLA) of retail space.

“Our portfolio is worth RM500mil, which is about 1% market share of the NLA shopping space,” Jaffar said, adding that there were about 200 shopping centres in Malaysia built over 20 years ago with huge potential for a turnaround.

Currently, the trust owns two assets – Subang Parade in Selangor and Makhota Parade in Malacca - worth a combined RM523mil.