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KUALA LUMPUR: Tower Real Estate Investment Trust (Tower REIT) has posted a net profit of RM8.5 million for its first quarter (1Q) ended Mar 31, 2011, up 19.45% from RM7.11 million a year ago on higher revenue.
In a filing to Bursa Malaysia on Monday, Apr 26, the fund had posted revenue of RM12.85 million, rising 16.43% from RM11.03 million underpinned by significantly higher average occupancy rate of Menara HLA at Jalan Kia Peng here after the addition of new tenancies and expansion of existing tenancies.
Under its portfolio, the REIT also owns HP Towers in Jalan Semantan, Bukit Damansara and Menara ING in Jalan Raja Chulan here.
Basic earnings per share rose to 3.03 sen from 2.54 sen a year a go.
Its net asset value (NAV) stood at RM464.02 million, down from RM470.95 million. Meanwhile, NAV per unit stood at RM1.65 for the period, down from RM1.67 a year ago.
After the provision of income distribution, its NAV per unit will stand at RM1.62.
"The overall office occupancy remained stable while the rental continued to experience downward pressure amidst the substantial incoming supply," said the REIT manager GLM REIT Management Sdn Bhd.
On the fund's prospects, the manager said it foresees continued challenges to the office market due to an imbalance between supply and demand of office space.
"Unless there is a substantial increase in net demand, the competition from the newly completed office buildigns and the anticipated incoing supply is expected to exert downward pressure on the office occupancy and rental rates," it said.
The manager said it will continue to proactively manage the assets under the fund's portfolio to protect its rental income stream and explore acquisition opportunities for the REIT's expansion.
"Barring any unforeseen circumstances, we expect the trust to sustain its performance in 2011," it added.
GuocoLand (Malaysia) Bhd, the property development arm of the Hong Leong Group, has a 20% stake in the REIT while GLM REIT Management Sdn Bhd is a GuocoLand (Malaysia) unit.
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