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KUALA LUMPUR (July 28): CapitaLand Malaysia Trust (KL:CLMT) sees no immediate impact on tenant sentiment or leasing demand following the new 10% tariff imposed by the US on Malaysian exports.
The trust's manager, CapitaLand Malaysia REIT Management Sdn Bhd (CMRM), said the impact of the tariff, effective from July 24, has so far not affected tenant business operations or mall footfall.
"At the moment, we have not seen the impact of the tariff to our tenants and therefore to the people who visit the malls. This news came out recently, so we will continue to monitor as it pans out," said CMRM chief executive officer Yong Su-Lin during the trust’s second-quarter results briefing on Monday.
CLMT head of investments Matthew Loh Woei Lieh added that lease agreements for existing industrial and logistics assets remain locked in under long-term contracts, sheltering the portfolio from immediate tariff shifts.
CLMT reported a 12.5% year-on-year increase in its net property income to RM77.4 million for the second quarter ended June 30, 2026 (2QFY2026), from RM68.7 million a year earlier, driven by stronger performance across its existing properties, coupled with lower property expenses.
Gross revenue rose 6.3% to RM123.1 million from RM115.7 million. Distributable income jumped 25.6% to RM43.4 million from RM34.6 million.
CLMT posted an overall portfolio occupancy rate of 94.4% as at end-June 30, 2026, representing a 1.1 percentage point year-on-year improvement compared with 93.3% as at June 30, 2025.
CLMT's industrial assets maintained full 100% occupancy, while the retail portfolio achieved 93.2% occupancy.
Ex-Klang Valley retail assets saw occupancy levels above 98%, led by Queensbay Mall in Penang, which is fully occupied, followed by East Coast Mall in Kuantan (99.7%) and Gurney Plaza (98.4%).
Klang Valley retail assets maintained stable occupancy rates, including 89.8% for Sungei Wang Plaza, 83.6% for The Mines and 82.2% for 3 Damansara as at end-June this year.
Retail rental reversions remained stable, with an 11.6% increase portfolio-wide for 1HFY2026. Retail properties in the Klang Valley recorded a 12.2% rental reversion, while assets outside the Klang Valley registered an 11.5% reversion.
As for lease renewals, the REIT has locked in 57% of total gross rental income expiring in FY2026.
"The team is still negotiating for the rental renewals that are due towards the second half of this year. At the moment, it is probably quite preliminary to be able to say whether it's going to be strong, but we are quite positive on the rental reversions that we are negotiating," said Yong.
On the withholding tax changes imposed on REIT distributions, Yong said the impact on CLMT is expected to be limited going forward given that CLMT’s dividend yield remains attractive, and its unit price has stabilised since the government announced the tax changes in March.
Malaysia decided in March to stop giving a preferential rate of 10% for withholding tax on dividends from REITs for most non-corporate investors beginning 2026.
Foreign individuals and institutional investors will be taxed at 30% of chargeable income. Non-resident corporations, meanwhile, will pay a final 24% withholding tax rate. Malaysians, meanwhile, will be taxed based on prevailing individual rates with no withholding tax deduction.
CLMT unit prices have fallen 13% from their February high of 70 sen, hovering around the 60 sen level since March. The REIT rose to 62 sen on Tuesday, giving a market capitalisation of RM2 billion.
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