CapitaMalls Malaysia Trust has warned that higher utilities costs in the country will raise costs.CapitaMalls Malaysia Trust has indicated that it remains optimistic on prospects for the Malaysian economy.

Malaysia-listed retail REIT CapitaMalls Malaysia Trust (CMMT) reported a 6.4% year-on-year growth in distribution per unit (DPU) for its 1Q 2014.

The REIT recorded a distribution of 2.32 sen for the quarter ended 31 March 2014 as compared to the 2.18 sen for the same period last year. The annualised DPU of 9.41 sen is similarly 6.4% higher than the same period last year, and translates to an annualised distribution yield of 6.5% based on CMMT’s closing price of MYR1.44 per unit on 15 April 2014.

CMMT recorded distributable income of RM41.2 million for the quarter, 6.9% higher than the MYR38.5 million for 1Q 2013. Net property income came in at MYR52.5 million, an increase of 1.8% over the MYR51.5 million for the corresponding period last year. The REIT has partly attributed the increase to the completion of Phase 1 asset enhancement works at East Coast Mall in Kuantan.

Moving forward, the REIT expects healthy operating conditions moving forward despite issuing warnings of higher utilities costs during a unit holders' meeting earlier in the month.

Mr David Wong Chin Huat, Chairman of the REIT's manager, said, “The Malaysian economy is expected to remain on a steady growth path, expanding by between 4.5% and 5.5% this year. Though the recent adjustment in property assessment fees and the hikes in electricity tariffs in Kuala Lumpur have had spillover effects on CMMT’s property operating expenses, we expect that our portfolio of necessity shopping malls will continue to deliver stable returns for unitholders.”

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.