Lippo Malls REIT report 18% fall in DPU on weaker IDR, rents

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Lippo Malls Indonesia Retail Trust (LMIRT) has reported a distribution per unit (DPU) of 0.55 Singapore cents for its 1Q 2019, a decline of 17.9% year-on-year.

The REIT’s gross rental income dipped 7.1% to SGD37.4 million in 1Q 2019, from SGD40.3 million in the corresponding period of 2018.

However, total gross revenue for the quarter grew 34.2% year-on-year to SGD65.9 million following the taking over of the collection of service and utilities recovery charges directly from tenants.

LMIRT has attributed the weaker gross rental income to lower revenue from Lippo Plaza Batu and Palembang Icon on the expiry of the master leases in July 2018, and the continued weakening of the IDR.

As at 31 March 2019, the REIT’s portfolio occupancy was at 91.5%, which is above the industry average of 80.7% in Indonesia.

Its gearing has improved to 33.9% compared to 34.6% as at 31 December 2018, with 58.1% of debt on a fixed-rate basis.

For the quarters ahead, LMIRT expects a gradual strengthening of the IDR, and stable interest rates to boost consumption and investment in Indonesia in the near term.

LMIRT was last done on the Singapore Exchange at SGD0.20.

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