KUCHING: MRCB Quill Management Sdn Bhd (MQM), the manager of MRCB-Quill REIT, a listed real estate investment trust, wishes to announce that MQReit achieved a realised net income of RM21.42 million for the fourth quarter of 2017 (4Q17).
This is an increase of approximately 61 per cent from the realised net income of RM13.30 million recorded for 4Q16. The higher realised net income for this quarter was attributable to the recognition of income from Menara Shell, net of higher property operating expenses, finance costs, trustee’s fee and manager’s fee.
For the full year, MRCB-Quill REIT achieved a realised net income of RM88.01 million, an increase of 48.8 per cent compared to the realised net income of RM59.16 million recorded for the financial year ended FY16.
Correspondingly, realised earnings per unit (EPU) for financial year ended FY17 of 8.24 sen was recorded.
After taking into consideration the non-cash adjustment for manager’s fee payable in units and net fair value loss on investment properties, MRCB-Quill REIT achieved a distributable income for FY17 of RM92.4 million.
FY17 distribution per unit (DPU) was 8.39 sen, which is 0.1 per cent higher compared to the FY16 DPU of 8.38 sen. The FY17 DPU of 8.39 sen translates to a distribution yield of 6.7 per cent based on the closing price of RM1.25 per unit as at 29 December 2017.
Tan Sri Saw Choo Boon, chairman of MQM said: “We expect the office market outlook to remain challenging this year. We will focus on asset management and leasing strategies that are centered on tenant retention as well as managing MRCB-Quill REIT’s operational cost effectively.”
Yong Su-Lin, chief executive officer of MQM said: “The manager’s active leasing and asset management strategies throughout the year has ensured successful tenant renewals of 80 per cent for the leases due in 2017.
“On the back of this as well as new tenancies entered during the year, MRCB-Quill REIT’s average occupancy rate for the year stood at 96.3% in terms of Net Lettable Area (NLA).
“In respect of 2018, MRCB-Quill REIT has approximately 28 per cent of its leases based on NLA that are due for renewal, with the bulk of the leases due after the first half of 2018.
“In tandem with executing our on-going marketing strategies, we continue to identify asset enhancement initiatives centered on enhancing the quality and physical condition of MRCB-Quill REIT’s portfolio of properties.
“Premised on the above, scheduled enhancement works will be initiated for a few properties for this financial year, namely Wisma Technip, Plaza Mont Kiara, Platinum Sentral and Menara Shell.”
She added: “As at Dec 31, 2017, MRCB-Quill REIT’s gearing ratio stood at 37.3 and 76 per cent of its total borrowings are on fixed interest rate.
“As part of our capital management strategy to maintain majority of fixed rate borrowings, we will continue to monitor the interest rate environment with the aim of locking in fixed interest rates at an appropriate time via interest rate swaps.
“This will help to mitigate MRCB-Quill REIT’s exposure to future interest rate risk and provide income stability to the Trust.”