LMIR Trust reports 2Q19 net property income rose 2 percent amid positive rental reversions

Indonesian rupiah notesIndonesian rupiah notes

Lippo Malls Indonesia Retail Trust reported Thursday its second quarter net property income rose 1.9 percent on-year to S$43.97 million on cost-management initiatives and positive rental reversions for renewed rental spaces.

The performance was helped by a more-stable Indonesian rupiah, which depreciated a lower 0.6 percent against the Singapore dollar during the quarter, the trust said.

Total gross revenue rose 29.7 percent on-year to S$68.27 million in the quarter ended 30 June on higher service and utilities recovery charges collected directly from tenants, the trust said in a filing to SGX.

That was offset by gross rental income falling 5.8 percent on-year in the quarter to S$39.0 million on lower income from Lippo Plaza Batu and Palembang Icon on the expiry of master leases in July 2018 and lower casual leasing income during the quarter, the filing said.

The distribution per unit (DPU) was 0.60 Singapore cent, up 1.7 percent from 0.59 Singapore cent in the year-ago period, LMIR Trust said.

“Despite the current challenging macroeconomic and operating landscape, the trust has delivered a second consecutive quarter of creditable performance buoyed by the recovering Indonesian rupiah against the Singapore dollar, the disciplined cost management initiatives that we have implemented during the year, and the strength of our underlying portfolio which continues to deliver steady performance with an improved occupancy rate,” James Liew, CEO of the REIT’s manager, said in the statement.

““In addition, we remain committed to active asset management to refresh our malls to stay ahead of new consumer trends, and to optimise mall spaces and tenant mix to bolster performance,” Liew said.

In rupiah terms, second quarter net property income rose 1.6 percent on-year to 459.30 billion rupiah on total gross revenue of 713.07 billion rupiah, up 29.4 percent on-year, the filing said.

Portfolio occupancy was “healthy” at 92.2 percent, compared with an industry average of 80.7 percent and 91.5 percent in the first quarter, LMIR Trust said. Rental reversions for the January-to-June period were a positive 4.4 percent, the filing said.

LMIR Trust’s portfolio has 23 retail malls and seven retail spaces located in other retail malls, all located in major Indonesian cities with large middle-income populations, the filing said.

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