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Hektar REIT’s portfolio consists of five well-established shopping centres in various states on the West Coast of Peninsular Malaysia.
The portfolio provides a good geographical diversification to the REIT. The REIT is in the midst of acquiring another mall in Segamat, Johor. The acquisition is expected to complete in second half of 2017, where upon completion, the enlarged portfolio will be made up of six malls across Peninsular Malaysia, with approximately 2.0 million square feet of retail space.
The Manager aims to enhance the long-term value of the portfolio via key operating, investment and capital management strategies. The performance achieved by each centre in the financial year 2016 is set out in the following pages.
1.8 million sq ft
3.0 million residents
30.1 million per annum
Data current as at 31 December 2016.
1 Spectrum Research Asia Sdn. Bhd., December 2012 (Independent Research), within 20-minutes drive.
2 NLA Tenants only
|Primary Trade Area1
|NLA (Retail)2||507,150 sq ft||519,542 sq ft||159,153 sq ft||311,230 sq ft||281,388 sq ft|
|Visitor Traffic FY2016||9.2 million||9.4 million||4.6 million||3.9 million||3.0 million|
|Purchase Price (RM)||287.0 million||257.5 million||117.5 million||83.3 million||98.0 million|
|Valuation (RM)2||427.2 million||322.4 million||135.2 million||95.7 million||112.0 million|
|Gross Revenue FY2016 (RM)2||49.0 million||40.2 million||13.6 million||10.3 million||11.5 million|
|Net Property Income (NPI) FY2016 (RM)2||31.5 million||22.2 million||8.1 million||5.8 million||6.7 million|
1 Source: Spectrum Research Asia Sdn. Bhd., December 2012 (Independent Research), within 20-minutes drive
2 As at 31 December 2016.
* until year 2101
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Hektar’s portfolio of assets have achieved an aggregate occupancy rate of 96.2% as at 31 December 2016. Despite tough retail environment, Wetex Parade has achieved full occupancy.
|Property (Occupancy as at 31 December)||2016||2015||2014||2013||2012|
*The weighted average occupancy rate is calculated based on NLA
Visitor traffic is measured by FootFall, a computerised video-based traffic monitoring system. Visits to Mahkota Parade has increased slightly by 3.3% but Subang Parade and Landmark Central have decreased slightly. Both of the latter malls will be undergoing major asset enhancement initiatives in 2017. Shopper traffic at Wetex Parade and Central Square remained stable at 4.6 million and 3.9 million respectively.
|Property (Number of Visits)||2016||2015||2014||2013||2012|
|Subang Parade (million)||9.2||9.8||9.5||8.5||7.7**|
|% Change in Traffic||(6.1%)||3.2%||11.8%||10.4%||(2.5%)|
|Mahkota Parade (million)||9.4||9.1||10.0||10.4||11.0|
|% Change in Traffic||3.3%||(9.0%)||(3.8%)||(5.5%)||34.1%|
|Wetex Parade (million)||4.6||4.6||4.8||4.8||5.2**|
|% Change in Traffic||—||(4.2%)||0.1%||(7.7%)||(11.9%)|
|Central Square* (million)||3.9||3.9||3.3||4.1||—|
|% Change in Traffic||—||18.2%||(19.5%)||—||—|
|Landmark *Central (million)||3.0||3.2||3.2||3.4||—|
|% Change in Traffic||(6.3%)||—||(5.9%)||—||—|
* Footfall system for Central Square and Landmark Central was installed only in late November 2012. Footfall for these two malls are reported from January 2013 onwards.
The portfolio tenancy mix is dominated by department stores and supermarkets, which are led by Parkson, The Store and Giant constitute 36.5% of total portfolio NLA. In terms of rental income, the largest segment remains fashion and footwear, which contributes 22.0% of monthly rental income. Food and beverage comes closely behind, constituting 21.6% of the portfolio monthly income.
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The top ten tenants in the portfolio contributed 28.6% of total monthly rental income, providing a diversified revenue base. After the top tenant, Parkson, which contributed 9.7% monthly rental income, no other tenant contributed more than 6.0%.
|% of Total
|% of Monthly
|1||Parkson||Department Store / Supermarket||254,009||14.3%||9.7%|
|2||The Store||Department Store / Supermarket||273,198||15.4%||5.9%|
|3||Seleria||Food & Beverage||35,468||2.0%||2.5%|
|4||Giant Supermarket||Department Store / Supermarket||96,283||5.4%||1.7%|
|5||MBO Cinemas||Leisure & Entertainment/Sports & Fitness||83,705||4.7%||1.7%|
|6||Bata||Fashion & Footwear||7,322||0.4%||1.6%|
|7||McDonald’s||Food & Beverage||14,124||0.8%||1.5%|
|8||KFC||Food & Beverage||17,431||1.0%||1.5%|
|9||Kenny Roger Roasters||Food & Beverage||7,625||0.4%||1.3%|
|Top 10 Tenants
(By Monthly Rental Income)
*Based on monthly rental income for December 2016
For the year ended 31 December 2016, the portfolio recorded 140 new and renewed tenancies, with an overall weighted average rental reversion of -9%. The negative reversion is generally caused by the tough retail and macro-economic environment.
Landmark Central maintains healthy reversion due to its monopolistic position in the market.
(Ended 31 December)
|No. of New
Tenancies / Renewals
|NLA (sq ft)||% of
Increase / (Decrease)
Over Previous Rent Rates
|Total / Average*||140||342,005||19%||(9%)|
* The weight average is calculated based on NLA. Figures as at 31 December 2016
For the year 2017, a total of 207 tenancies will expire, representing approximately 59% of NLA and 56% of monthly rental income as at
31 December 2016. The expiries are slightly more concentrated in 2017 due to the expiry of several anchor tenants. However, the tenancies are secured with options-to-renew and are confirmed six months prior to their expiries.
|For Year Ending 31 December||No. of Tenancies Expiring||NLA of Tenancies Expiring
|NLA of Tenancies Expiring as % of Total NLA||% of Total Monthly Rental Income*|
* Based on monthly rental income for December 2016.
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As at 31 December 2016, turnover rent provisions were present in approximately 93% of the tenancies in the portfolio. Step-up rent provisions were present in approximately 41% of tenancies within the portfolio.
A turnover rent provision allows for rent calculated as a proportion of annual turnover of the tenant’s business. Turnover rent is paid to the REIT if it exceeds the base rent specified in tenancy agreements on an annual basis. A step-up rent provision as specified in tenancy agreements is a pre-determined increase in rent at defined intervals during a tenancy agreement, typically each year and forms the base rent of any tenancy agreement.
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