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The manager of Sentral REIT anticipates a healthy rebound in the property sector by the end of 2021

Published: Friday, 26 November 2021
Sentral REIT owns nine buildings valued at RM2.097 billion as at December 31, 2020

Sentral REIT (formerly MRCB-Quill REIT) will continue to be proactive in asset management and will be in a position to benefit from the eventual recovery of the Covid-19 pandemic, though there may be some headwinds with the possibility of further resurgences of the virus.

Tan Sri Saw Choo Boon, chairman of Sentral REIT Management (SRM) Sdn Bhd, said this in a statement today.

He stated that as the national vaccination programme progresses, he anticipates the gradual reopening of various economic sectors and a healthy rebound in the property sector by the end of this year.

SRM, (formerly known as MRCB Quill Management Sdn Bhd), is the Manager of Sentral REIT, which owns nine buildings comprising four in Cyberjaya, four in Kuala Lumpur, and one in Penang. The assets are valued at RM2.097 billion as at December 31, 2020.

Malaysian Resources Corp Bhd, Quill Resources Holding Sdn Bhd, and Global Jejaka Sdn Bhd have 41 per cent, 39 per cent, and 20 per cent stake respectively in SRM.

According to SRM chief executive officer Yong Su-Lin, the company's proactive leasing efforts have kept Sentral REIT's portfolio occupancy at a healthy 91 per cent as of September 30, 2021.

As a result, the REIT's performance for the third quarter ended September 30, 2021 (3Q 2021) has been stable, she said in the statement.

Sentral REIT reported a realised net income of RM22.11 million for the third quarter of 2021, an increase of about three per cent from the realised net income of RM21.48 million reported in the third quarter of 2020.

Despite lower revenue contribution from Sentral REIT's portfolio, higher realised net income for this quarter was achieved, mainly attributable to lower property operating expenses and finance cost, according to a stock exchange filing.

For the nine months to September 2021, Sentral REIT recorded a realised gross revenue of RM119.2 million, which was RM5.4 million or 4.3 per cent lower than the previous nine months that ended on September 30, 2020.

The decrease was mainly due to lower revenue generated from QB3-BMW, Plaza Mont Kiara, Wisma Technip, and Platinum Sentral, the filing showed.

Sentral REIT’s realised gross revenue of RM119.2 million fell 4.3 per cent from the previous nine months in 2020 mainly due to lower revenue generated from QB3-BMW and three other properties.

Net income for the nine months to September 30, 2021, was RM65.5 million, as versus RM60.7 million achieved in the same period a year ago.

Sentral REIT believes that the Klang Valley office and retail markets will remain challenging as a result of the ongoing pandemic uncertainty.

To overcome the challenging operating environment, the REIT will continue to focus on asset management and leasing strategies centred on cost optimisation and tenant retention.

In terms of lease renewals, Sentral REIT has about 440,000 sq ft (22 per cent of its total leased net lettable area) due for renewal in 2021 with the bulk of these leases due in the last quarter of 2021.

Up to 3Q 2021, 198,000 sq ft of leases were due, of which about 81 per cent of these leases have been successfully renewed.

"We are now finalising the remainder of leases due in the last quarter," said Yong.

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