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UOA, Pavilion REIT boosts affect profits, income projections
Jul 18, 2012
UOA Real Estate Investment Trust's (UOA REIT) pre-tax profit for Q2 ended 30 June climbed to RM14.583 million, up from RM10.682 million in the previous year.
Revenue also increased to RM24.409 million from RM20.286 million over the same period last year.
UOA REIT, which currently owns six prime properties in Kuala Lumpur with RM1.03 billion portfolio, recorded a 7.7 percent gross rental which was attributed to marginal improvement in occupancy rates.
Meanwhile, total expenditure inched up by about 10.9 percent due to increased property operating expenses and borrowing costs.
UOA REIT's manager does not expect any major fluctuation in the occupancy or rental rates in the second half of this year.
The company will also continue to adopt an active capital and operating management strategy that will enhance the yields and returns of its existing properties while seeking opportunities to acquire properties that meet the objectives of the trust.
Meanwhile, Pavilion Real Estate Investment Trust (Pavilion REIT) could boost its net property income by RM50 million, assuming that the extension of Pavilion Kuala Lumpur achieves higher average rental, according to HwangDBS Vickers Research Sdn Bhd.
The research firm assumes the average rental to be RM20 psf, a 15 percent increase from the current RM17.40 psf.
Based on a 6.5 percent acquisition yield hurdle, HwangDBS values the extension at RM768 million.
"Riding on the strong demand for bigger retail lots, we assume 100 percent occupancy for the extension and a conservative five per cent growth in rental for the 2012-2013 financial years and a 10 percent growth in 2014," it said.