CapitaLand’s Malaysia mall business has significantly improved returns on the back of a major acquisition.
CapitaLand Malaysia Mall REIT Management (CMRM) says its CapitaLand Malaysia Mall Trust (CMMT) achieved net property income (NPI) of RM60 million (US$14.8 million) for its second quarter this year.
This was 14.5 per cent higher than the NPI of RM52.4 million for the corresponding period last year, and is attributed mainly to new income from Tropicana City Mall and Tropicana City Office Tower, acquired in July last year, as well as higher contributions from Gurney Plaza and East Coast Mall.
“While the Malaysian economy grew 4.2 per cent for the first quarter of the year, underpinned by domestic demand and private-sector spending, retail sales decreased 4.4 per cent,” says CMRM chairman David Wong.
He says this followed a high base in the first quarter of last year when consumers rushed to buy goods before the implementation of the Goods & Services Tax (GST). The gradual increases in the prices of goods and services this year have further reduced consumers’ spending power.
“With the current uncertain economic climate, we expect consumer and business sentiments to remain cautious for the rest of the year as concerns over the rising costs of living persist.
“Notwithstanding that, we believe our portfolio of well-diversified malls will continue its stable performance.”
CMRM CEO Low Peck Chen says that though Sungei Wang Plaza’s income is temporarily affected by the ongoing Mass Rapid Transit works and redevelopment of BB Plaza, the increased contributions of other malls helped cushion the impact.
“Despite a challenging operating environment, we continue to improve the shopping experience in our malls by introducing new-to-market brands, identifying asset enhancement improvement opportunities and organising various marketing activities.
“Among the new-to-market brands, RockStar Gym, a one-stop children’s total development centre established in Indonesia, opened its first outlet in Malaysia, in The Mines. We extended the toys and hobbies cluster in Sungei Wang Plaza by including more tenants, and are also carrying out asset enhancement works at Tropicana City Mall.”
As part of the group’s commitment to organise creative marketing activities to drive shopper traffic and tenants’ sales, the first public urban gardening event in a shopping mall in Malaysia was held at Tropicana City Mall.