CMMT records net property income of RM40.8 million for 3Q 2020
Distribution per unit of 1.13 sen for the quarter
Kuala Lumpur, 28 October 2020 – CapitaLand Malaysia Mall REIT Management Sdn. Bhd. (CMRM), the manager of CapitaLand Malaysia Mall Trust (CMMT), announced today a net property income (NPI) of RM40.8 million for the quarter ended 30 September 2020 (3Q 2020), 17.2% lower than the same period last year. This was mainly attributed to higher vacancies and the rental relief granted to Affected Tenants[1] as they progressively resumed operations under Malaysia’s Recovery Movement Control Order (RMCO). Distributable income for the quarter was RM23.2 million and distribution per unit (DPU) was 1.13 sen.
Mr David Wong, Chairman of CMRM, said: “We are witnessing a resurgence in COVID-19 cases following the reopening of major economies around the world. In Malaysia, the Government has extended the RMCO till the end of 2020 to slow down transmission rates. With the recent increase in COVID-19 cases, several areas – including Klang Valley – have been placed under the Conditional Movement Control Order (CMCO) from 14 October to 9 November. The reintroduction of the CMCO is expected to impact Malaysia’s retail recovery.”
“In light of the prevailing cautious business and consumer sentiments exacerbated by COVID-19, the operating environment for Malaysia’s retail industry continues to be challenging in the near-term. We will continue to keep a pulse on the evolving situation and closely engage with our tenants. In addition, we will focus our efforts on stabilising the portfolio through proactive asset and lease management to build greater resilience in CMMT’s retail ecosystem.”
Ms Low Peck Chen, CEO of CMRM, said: “CMMT’s 3Q 2020 results reflected the impact of higher vacancies due to uncertainties caused by COVID-19, and rental relief for Affected Tenants amidst the pandemic. Despite the disruptions caused by the pandemic, the successful completion of Gurney Plaza’s contemporary food hall in September 2020 demonstrates our commitment towards enhancing unitholder value through sustainable asset enhancement initiatives. Gurney Plaza continues to attract brands new to the Northern region. New openings in 3Q 2020 included affordable luxury fashion Tommy Hilfiger, activewear Calvin Klein Performance and pastry cafe Châteraisé.”
“With most of our tenants having resumed operations since June 2020, shopper traffic and tenant sales per square foot for the first nine months of 2020 have recovered to about 58% and 82% respectively of last year’s levels. To date, we have renewed over 50% of the leases due this year and are in advanced negotiations for the remaining major expiring leases. On the capital management front, we have recently refinanced a fixed rate term loan at a lower rate, which will provide us with annual interest savings. The completion of the 1H 2020 Distribution Reinvestment Plan will further provide CMMT with greater flexibility in cashflow management.”
“Given the fluid nature of the pandemic and heightened macroeconomic uncertainties, we maintain a cautious view of near-term market conditions. Our focus is on strengthening our operational efficiency and supporting our tenants in adapting to the new normal, so that CMMT’s retail ecosystem will emerge stronger from COVID-19. Notwithstanding near-term challenges, we remain positive on CMMT’s long term prospects on the strength of our income- and geographically-diversified assets.
For the safety and well-being of shoppers, tenants, visitors and employees, precautionary measures in accordance with health authorities’ guidelines have been implemented at all CMMT properties. Innovative tech solutions have also been used to enhance the malls’ cleaning and disinfecting routines.
Note:
1 Shopping mall tenants providing non-essential services or supplies that were mandated to close during the Movement Control Order and the Conditional Movement Control Order.
Summary of CMMT’s results