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Mall owner CMMT says retail sector recovery is uncertain

TheStar Tue, Jul 21, 2020 06:50pm - 4 months ago

KUALA LUMPUR: Capitaland Malaysia Mall Trust (CMMT) said almost all of its tenants has resumed business, but warned that the operating environment remained challenging in the near term.

“Whilst there has been a gradual return in shopper footfall, the recovery of Malaysia’s retail sector is still uncertain as consumer sentiment remains cautious," CapitaLand Malaysia Mall REIT Management Sdn Bhd's (CMRM) chairman David Wong said in a statement today.

CMRM is the manager of CMMT.

"We will continue to monitor the situation closely and remain committed to ride out this difficult period with our tenants," he said.

"Our focus is on stabilising the portfolio through proactive asset and lease management to build greater resilience in CMMT’s retail ecosystem, in line with the long-term interest of unitholders.”

Net profit at CMMT was almost wiped out in the second quarter ended June 30 to RM192,000 compared with RM10.15mil posted a year ago.

Gross revenue fell 41% to RM49.9mil.

The decrease was mainly due to significant rental waivers and rebates given to tenants who fall under the category of non-essential services across all the malls during the various phases of the MCO, lower car park and marcom income as well as lower recovery of utilities during the MCO period.

Portfolio occupancy declined to 88.3% as at end of June.

"Amidst the slowdown, we have signed new leases representing about 30% of the net lettable area that is due for renewal this year, and are in advanced negotiations for the remaining major expiring leases," CMRM CEO Low Peck Chen said.

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