The parent of Malaysian shopping centres including Tropicana and East Coast Mall has reported declining income for the first quarter of this year.
CapitaLand Malaysia Mall REIT Management (CMRM), the manager of CapitaLand Malaysia Mall Trust (CMMT), has reported net property income of RM59.7 million (US$13.5 million) for the quarter to March 31, slightly lower than the RM60.6 million for the same period last year.
CMRM says this was mainly due to lower contribution from the Klang Valley shopping malls, which was mitigated by better performance from Gurney Plaza and East Coast Mall.
David Wong, chairman of CMRM, said with the gradual improvement in global growth and the continued rise in domestic demand, Malaysia’s economy is forecast to grow by between 4.3 per cent and 4.8 per cent this year.
“Concerns about rising costs of living are likely to persist, and consumer and business sentiments are expected to remain cautious. The operating environment for the retail industry remains challenging, with competition intensifying as new malls open. Notwithstanding the challenges, we are optimistic that CMMT’s portfolio of quality malls, which are strategically located in key urban centres and largely focused on necessity shopping, will continue to deliver sustainable income distributions for unitholders in the long term.”
Low Peck Chen, CEO of CMRM, said that during the quarter, Gurney Plaza – CMMT’s largest revenue contributor – turned in a solid performance with a 12.2 per cent increase in net property income, due to higher rental rates achieved from new and renewed leases.
“The sustained growth of Gurney Plaza and East Coast Mall – which collectively accounted for about 60 per cent of CMMT’s net property income – has helped to moderate the lower revenue contribution from our malls located in Klang Valley, which have been affected by rising competition in the area.”
CMMT’s malls have a combined occupancy rate of 95 per cent.
She said the company had continued to refresh its tenant mix and introduced new concepts in its malls during the quarter. Tropicana City Mall boosted its food and beverage offerings, including adding Oliver Gourmet, Malaysia’s first homegrown gourmet food hall. Malaysia’s first indoor kart drifting centre Blastacars opened in Sungei Wang Plaza.
“In response to consumers’ growing desire to engage in more interactive and innovative experiences, we will continue to make improvements to CapitaStar and invest in digital technology to better integrate our offerings into the lifestyles of today’s digitally-savvy consumers,” said Low Peck Chen.
“As part of continual efforts to enhance the shopping experience, we have also lined up asset enhancement initiatives to refresh our offerings at Gurney Plaza and Tropicana City Mall, as well as to improve the pedestrian connectivity of Sungei Wang Plaza.”