PETALING JAYA: CapitaLand Malaysia REIT Management Sdn Bhd (CMRM), the manager of CapitaLand Malaysia Trust (CLMT), aspires for its strong performance in financial year ended Dec 31, 2023 (FY’23) to continue into FY’24.
CMRM CEO Tan Choon Siang said its FY24 performance will be driven by projected better market conditions, strategic initiatives and a resilient portfolio.
“A lot of the improvement in our metrics, such as occupancy and rental reversion, achieved last year was not fully reflected for the full year. Hence, we expect FY24 to be a better year,” he said during the group’s virtual briefing on its FY’23 financial results yesterday.
Tan said the real estate investment trust (REIT) will continue to be proactive in managing assets and capital, staying vigilant in identifying strategic opportunities to improve its portfolio performance while concurrently maintaining financial discipline.
Touching on consumer sentiments in light of impending higher service tax and high-value goods tax, Tan said that while the group believes there will be some impact, it has yet to see it reflected in its numbers.
“Logically, we expect it but since they have not been implemented, we are not seeing it yet,“ he remarked.
The group has observed improving trend in sales, footfall and occupancy in its portfolio.
“The better indicators of consumer sentiment are in malls that are more occupied. If you look at the trend there, we are not seeing a dent in terms of footfall or sales. Spending is quite resilient so far,” Tan said.
On the outlook for 2024, he said the industrial sector is expected to remain resilient with positive growth potential, mainly leveraging the anticipated expanding manufacturing and e-commerce markets.
Moreover, the sector is strongly supported by the government’s seven-year New Industrial Master Plan 2030, which aims to spearhead the industrial sector to greater heights.
On retail sector, Tan said the incoming supply of shopping malls in Klang Valley intensifies competition among malls, with upcoming ones including Warisan Merdeka Mall @ 118 and Pavilion Damansara Heights Phase 2.
“High-cost and uncertain interest rate environment continue to be key concerns of the retail market, prompting a cautious spending sentiment,” he added.
On the possibility of acquisitions Tan said the REIT is engaged in discussions with property vendors. He declined to share further details before finalisation, but said the focus areas for acquisition are in Johor, Klang Valley and Penang.
Tan said FY’23 was an active year for the company as it completed more than RM1 billion of acquisitions and a RM52 million maiden divestment.
“During the year, we raised RM227.8 million via an equity fundraising exercise, increased our market capitalisation by 30% to RM1.5 billion and delivered a total return of 12.1% to unitholders.
“We have intensified efforts to refresh our tenant mix and introduced new-to-market brands to our retail portfolio. As a result, our retail portfolio recorded an increased occupancy of 91.7% as at Dec 31, 2023 and a positive rental reversion of 7% in FY’23.
He added that shopper traffic rose 25.1% while tenant sales per square foot grew 7.8% year-on-year, which demonstrated improving retail sentiments and its ongoing efforts to enhance its retail malls.
