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) is predicting higher operating expenses in the coming quarters due to an increase in the cost of utilities in the country.

The warning was made at the REIT's annual general meeting (AGM) held on 3 April.

The REIT's management also indicated that adverse human traffic conditions into one of its mall, Sungei Wang Plaza, is expected to continue until at least 2017 when construction works of the Bukit Bintang Central Mass Rapid Transit (MRT) are scheduled to complete.

The REIT has not elaborated in numbers as to how these projected increase in operating costs and poor traffic conditions are going to affect revenue figures for the subsequent but remains optimistic that the affected mall will benefit from human traffic coming from the MRT station once construction work completes.

CMMT also cited figures from the Bank Negara Malaysia and Malaysian Retail Industry Report which predict a GDP growth of between 4.5%-5.5% and retail sales growth of 6% respectively.The REIT expects this to bolster revenue figures in the near term.

CMMT has positioned itself as the only pure-play retail REIT in Malaysia. Units in CMMT currently trade at MYR1.50 on the Bursa Malaysia.

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.