KUALA LUMPUR: Hektar Asset Management Sdn Bhd (Hektar), the manager for Hektar Real Estate Investment Trust (Hektar Reit), has adopted a cautious outlook on the Reit sector’s growth this year due to inflationary pressure and an uncertain global outlook that might affect domestic economic activities.
Hektar Reit chief executive officer Johari Shukri Jamil said the company is taking business sustainability measures, which include monitoring and reviewing its rental strategy and adopting prudent financial management, to ensure economic resilience and stable occupancy.
It has also introduced cost optimisation initiatives and enhanced its asset efficiencies to help cushion the impact of increasing interest rates and inflation.
“We actively explore avenues for growth by ensuring a solid portfolio of retail brands in our malls that can optimise sustainable returns and defensible income through active tenancy remixing and rejuvenation of the centres,” he told Bernama recently.
Johari emphasised that long-term strategies to increase dividend yields include enhancing and improving the mall’s visual appeal, conditions, and facilities.
He said since the retail landscape has been recovering from the Covid-19 pandemic, Hektar Reit’s portfolio of malls experienced a 58 per cent increase in visitor footfall and a 50 per cent higher vehicle count annually, significantly improving tenant sales performance.
Meanwhile, Johari said Hektar Reit is committed to fulfilling its obligation to ensure that all business activities are performed according to the high environmental, social and governance (ESG) standards.
He said the company had invested RM10 million in various climate-change-related initiatives over the past five years.
He further said the company has heavily invested in research and development, advancing the building and facilities, machinery and automation, such as installing chillers and replacing existing lighting with energy-saving light-emitting diode bulbs.
It has also embarked on renewable energy initiatives, pursued energy consumption, repaired the cooling towers, retrofitted air-conditioning and mechanical ventilation, and installed cold water systems.
In 2022, he noted that one of its malls, Segamat Central, realised a total savings of RM12,000 by replacing traditional bulbs with energy-saving LEDs.
“In the next phase of our initiatives, we hope to install solar panels across our malls. It is important to address electricity usage as it takes a huge portion of our utility bill, constituting about 89 per cent where we paid about RM19 million alone last year on electricity,” he said.
Johari Shukri noted that internally there were targets and the capital expenditure for ESG initiatives this year and what to achieve, but he could not share any information at this moment.
Hektar Reit currently owns two million square feet of retail space in four states, with assets valued at RM1.2 billion as of Dec 31, 2022.
Its revenue reached RM117.5 million in the financial year 2022 (FY) and is targeting to achieve up to 86 per cent in its overall portfolio occupancy rates for FY2023, against 82 per cent in FY2022.
Hektar Reit’s portfolio of commercial properties includes Subang Parade in Selangor; Mahkota Parade in Melaka; Wetex Parade and Classic Hotel in Muar, Johor; Central Square in Sungai Petani, Kedah; Kulim Central in Kedah and Segamat Central in Johor. -Bernama
