Property profiles
Hektar REIT’s portfolio consists of a regional shopping centre and five established neighbourhood-focused shopping centres in the Northern, Central and Southern Regions of Peninsular Malaysia.
The Manager aims to enhance the long-term value of the portfolio via key operating, investment and capital management strategies. The performance achieved by each centre in the latest financial year is set out in this section.
| Property | Subang Parade | Mahkota Parade | Wetex Parade | Central Square | Kulim Central | Segamat Central |
|---|---|---|---|---|---|---|
| State | Selangor | Melaka | Johor | Kedah | Kedah | Johor |
| Title | Freehold | Leasehold* | Freehold | Freehold | Freehold | Leasehold** |
| Primary trade area (Population) | 1,834,000 | 382,200 | 201,600 | 406,870 | 287,694 | 190,000 |
| NLA (retail) | 523,487 sq ft | 521,142 sq ft | 175,014 sq ft | 310,564 sq ft | 299,781 sq ft | 211,910 sq ft |
| Tenancies (NLA lots only) | 89 | 90 | 60 | 45 | 67 | 33 |
| Occupancy | 82.5% | 87.1% | 89.9% | 85.9% | 94.0% | 67.3% |
| Visitor traffic | 4.0 million | 2.8 million | 1.9 million | 1.9 million | 1.9 million | 0.7 million |
| Acquisition price | RM 280.0 million | RM 232.0 million | RM 117.5 million | RM 83.0 million | RM 98.0 million | RM 104.0 million |
| Valuation | RM 423.0 million | RM 323.5 million | RM 142.0 million | RM 90.0 million | RM 129.0 million | RM 57.0 million |
| Gross revenue | RM 30.4 million | RM 28.1 million | RM 12.7 million | RM 8.5 million | RM 13.3 million | RM 3.5 million |
| NPI | RM 17.2 million | RM 11.4 million | RM 6.7 million | RM 3.7 million | RM 8.4 million | (RM 0.5 million) |
- * until 2101; ** until 2116. Data as at 31 December 2021.
Portfolio diversification
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- * Numbers may not add up to 100% due to the negative NPI obtained by Segamat Central.
Occupancy
The portfolio recorded an overall occupancy rate of 84.9% as at 31 December 2021, down from 2020, as the retail industry continued to be impacted by the disruptions from the COVID-19 pandemic. Hektar REIT continues to implement rental reviews and rebate offers to support eligible tenants and implement strategic marketing initiatives to drive traffic back to our malls.
| Property | 2021 | 2020 |
|---|---|---|
| Subang Parade | 2021: 82.5% | 2020: 83.7% |
| Mahkota Parade | 2021: 87.1% | 2020: 92.5% |
| Wetex Parade | 2021: 89.9% | 2020: 94.5% |
| Central Square | 2021: 85.9% | 2020: 87.9% |
| Kulim Central | 2021: 94.0% | 2020: 93.9% |
| Segamat Central | 2021: 67.3% | 2020: 77.9% |
| Overall* | 2021: 84.9% | 2020: 88.4% |
- * The weighted average occupancy rate is calculated based on NLA.
Visitor traffic
Overall visitor traffic decreased to 13.2 million visits in 2021, impacted by the implementation of mobility restrictions through out the year to curb the COVID-19 pandemic in Malaysia.
| Property | 2021 | 2020 |
|---|---|---|
| Subang Parade | 2021: 4.0 million visits | 2020: 4.9 million visits |
| Mahkota Parade | 2021: 2.8 million visits | 2020: 4.5 million visits |
| Wetex Parade | 2021: 1.9 million visits | 2020: 2.5 million visits |
| Central Square | 2021: 1.9 million visits | 2020: 2.8 million visits |
| Kulim Central | 2021: 1.9 million visits | 2020: 3.0 million visits |
| Segamat Central | 2021: 0.7 million visits | 2020: 1.5 million visits |
| Total | 2021: 13.2 million visits | 2020: 19.2 million visits |
Tenancy mix
The largest rental contributors to the portfolio are tenants from the departmental store and the food & beverage segments. Both segments contributed 45% of the portfolio’s total rental income. In terms of NLA occupancy, department stores and supermarkets continue to dominate the portfolio by taking up 40% of all available NLA.
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- * Based on monthly rental income for December 2021.
- Numbers may exceed 100% due to rounding up.
Top 10 tenants
The top ten tenants in the portfolio contributed approximately 37.7% of total monthly rental income, providing a diversified revenue base. Aside from the top tenant, Parkson, which contributed approximately 11.7% of monthly rental income, no other tenant contributed more than 10%.
| Tenant | Trade sector | NLA | % of total NLA | % of monthly rental income* | |
|---|---|---|---|---|---|
| 1 | Parkson | Department Store/Supermarket | 252,515 sq ft | 12.4% | 11.7% |
| 2 | The Store | Department Store/Supermarket | 273,198 sq ft | 13.4% | 8.8% |
| 3 | GSC | Leisure & Entertainment/Sports & Fitness | 88,670 sq ft | 4.3% | 2.5% |
| 4 | MR. D.I.Y. | Homewares & Furnishing | 74,301 sq ft | 3.6% | 2.4% |
| 5 | Seleria Food Court | Food & Beverage/Food Court | 42,105 sq ft | 2.1% | 2.4% |
| 6 | Watson’s | Health & Beauty | 11,965 sq ft | 0.6% | 2.3% |
| 7 | Guardian | Health & Beauty | 12,164 sq ft | 0.6% | 2.1% |
| 8 | Giant Superstore | Department Store/Supermarket | 72,140 sq ft | 3.5% | 2.0% |
| 9 | MM Cineplexes | Leisure & Entertainment/Sports & Fitness | 75,928 sq ft | 3.7% | 1.8% |
| 10 | KFC | Food & Beverage/Food Court | 15,792 sq ft | 0.8% | 1.7% |
| Top 10 tenants (by monthly rental income) | ||
|---|---|---|
| 918,778 sq ft NLA | 45.0% of total NLA | 37.7% of monthly rental income* |
| Other tenants | ||
| 1,123,120 sq ft NLA | 55.0% of total NLA | 62.3% of monthly rental income* |
| Total | ||
| 2,041,898 sq ft NLA | 100.0% of total NLA | 100.0% of monthly rental income* |
- * Based on monthly rental income for December 2021.
Rental reversions
For the year ended 31 December 2021, the portfolio recorded 121 new and renewed tenancies, with an overall weighted average negative rental reversion of 7.0% on the back of rental reviews and rebate offers implemented by the REIT to support eligible tenants in the current challenging retail environment.
| Property | No. of new tenancies / renewals | NLA | % of total NLA | % increase / decrease over previous rent rates |
|---|---|---|---|---|
| Subang Parade | 17 new tenancies / renewals | 168,116 sq ft NLA | 32.1% of total NLA | -12.6% change over previous rent rates |
| Mahkota Parade | 30 new tenancies / renewals | 136,514 sq ft NLA | 26.2% of total NLA | -11.2% change over previous rent rates |
| Wetex Parade | 24 new tenancies / renewals | 125,230 sq ft NLA | 71.6% of total NLA | 6.4% change over previous rent rates |
| Central Square | 12 new tenancies / renewals | 148,771 sq ft NLA | 47.9% of total NLA | 3.7% change over previous rent rates |
| Kulim Central | 11 new tenancies / renewals | 148,644 sq ft NLA | 49.6% of total NLA | 6.2% change over previous rent rates |
| Segamat Central | 27 new tenancies / renewals | 74,024 sq ft NLA | 34.9% of total NLA | -30.1% change over previous rent rates |
| Total / average of rental reversions |
|---|
| 121 new tenancies / renewals |
| 801,299 sq ft NLA |
| 39.2% of total NLA |
| -7.0% change over previous rent rates |
- Figures as at 31 December 2021.
Tenancy expiry profile
A total of 291 tenancies will expire in 2022 representing approximately 34.2% of NLA and 55.1% of monthly rental income as at 31 December 2021. The management’s strategy is to continue tenancy remixing exercises by refreshing the tenant mix as tenant contracts expire. Key tenancies are secured with options to renew and are usually confirmed six months prior to their expiry.
| For year ending 31 December | 2022 | 2023 | 2024 |
|---|---|---|---|
| No. of tenancies expiring | 291 | 50 | 43 |
| NLA of tenancies expiring | 698,353 sq ft | 596,002 sq ft | 440,421 sq ft |
| NLA of tenancies expiring as % of total NLA | 34.2% | 29.2% | 21.6% |
| % of total monthly rental income* | 55.1% | 25.5% | 19.4% |
- * Based on monthly rental income for December 2021.
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Tenancy provisions
As at 31 December 2021, turnover rent provisions were present in 91% of tenancy contracts within the portfolio. Step-up rent provisions were present in 20% of tenancy contracts within the portfolio.
A turnover rent provision allows for rent calculated as a proportion of monthly or yearly turnover of the tenant’s business. Turnover rent is paid to the REIT if it exceeds the base rent specified in tenancy agreements on a monthly or yearly basis. A step-up rent provision stipulates pre-determined increases in rent at defined intervals during a tenancy agreement.
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