KUALA LUMPUR (Nov 10): Sentral REIT's net property income for the third quarter ended Sept 30, 2022 (3QFY22) declined 12.5% to RM28.4 million, from RM32.47 million a year earlier.

Earnings per unit decreased to 1.7 sen in 3QFY22, from 2.06 sen in 3QFY21, the real estate investment trust (REIT) said in a filing with Bursa Malaysia.

Similarly, quarterly revenue was down 11.92% to RM35.69 million from RM40.52 million, due to lower contributions generated from QB2-HSBC and Wisma Technip, but they were partially offset by the increase in revenues from Menara Shell and Plaza Mont Kiara.

For the cumulative nine months ended Sept 30, 2022 (9MFY22), Sentral REIT's net property income shrank 6.5% to RM86.85 million from RM92.92 million a year ago, while revenue dropped 6.88% to RM110.96 million from RM119.17 million during the same period.

It said the lower income recorded for 9MFY22 was mainly due to lower revenue contributions from Wisma Technip and Quill Building 2, which were partially offset by increase in revenues from Menara Shell and Plaza Mont Kiara, lower property expenses and finance costs.

Commenting on the REIT's performance, Sentral REIT Management Sdn Bhd (SRM) chairman Tan Sri Saw Choo Boon said its performance to date has been satisfactory, taking into consideration the challenging outlook of the Klang Valley office market and the rising interest rate environment, which he expects will persist throughout the rest of the year.

SRM chief executive officer Derek Teh Wan Wei said the REIT has 511,000 sq ft due for renewal in 2022, representing 28% of its total committed net lettable area. Some 494,000 sq ft or 96% is due year to date, with a renewal rate of 40% achieved.

Nonetheless, in line with the resumption of business activities post-pandemic lockdowns and the gradual return of employees to the office, he expects momentum of the Klang Valley office sector to progressively pick up.

"Riding on this positive momentum, we have intensified leasing efforts to market the available spaces within the portfolio with the aim of improving the portfolio occupancy rate," he added.

Meanwhile, Teh said Sentral REIT's capital management approach continues to be prudent and disciplined. As Bank Negara Malaysia continues with its monetary tightening path, regular reviews will be carried out on the optimal mix of fixed and floating rate borrowings.

Sentral REIT rose half a sen or 0.57% to 88.5 sen as of 3.30pm on Thursday (Nov 10), giving the group a market value of RM949 million.