1 Excluding fair value adjustmentDELIVERING VALUE
KLCCP Stapled Group recorded revenue of RM1.4 billion, a top-line increase of 1.8% Year-on-Year (YoY) from RM1.3 billion in 2016. This was driven by the strength and resilience of the office and retail segments which underpinned the earnings growth and improved performance of the hotel segment.
KLCCP Stapled Group achieved profit attributable to the holders of Stapled Securities of RM877.9 million inclusive of fair value gain on investment properties of RM182.5 million. Excluding the effect of fair value gain, profit attributable to the holders of Stapled Securities stood at RM720.4 million.
In line with the continued pursuit of our strategy aimed at enhancing value to the holders of Stapled Securities, KLCCP Stapled Group distributed 97% of its distributable income with an increase of 1.4% of its distribution per stapled security from 35.65 sen in 2016 to 36.15 sen in 2017. This is testament to our commitment in delivering value and growth.RE-DEFINING OUR BUILDING BLOCKS
The office segment continued to be the main driver providing strong asset stability underpinned by the locked-in long term leases. It remained as the major contributor to KLCCP Stapled Group’s revenue at 43%. During the year, KLCCP Stapled Group successfully secured two new long-term leases for Menara ExxonMobil with ExxonMobil Exploration & Production Malaysia Inc. (EMEPMI) and PETRONAS for a tenure of 18 years respectively. This has put our office segment back on strong footing with full occupancy for our office properties.
We also worked with our tenant, PETRONAS in undertaking a revamp of their strategy to create a ‘Workplace for Tomorrow’, a transformation of office space encouraging more collaborative interaction. This transformation which saw completion for certain levels of the PETRONAS Twin Towers, Menara Dayabumi and Menara ExxonMobil, will be undertaken in all our office buildings within the portfolio with completion targeted by 2020.
Our retail segment retained its 35% contribution to the Stapled Groups’ revenue, with a resilient performance in spite of the rapid transformation taking place in the retail landscape. Living up to its tagline of “Always Something New”, Suria KLCC brought in 38 new tenants, attracting luxury brands that offer differentiation in delivering a tailored shopping experience based on customer preferences. Suria KLCC achieved an impressive Total Moving Annual Turnover breaching the RM2.6 billion mark for the year ended 31 December 2017.
Suria KLCC also enhanced its facilities within the mall by replacing two Centre Court bubble lifts with three brand new glass lifts, catering to larger volumes and improving visibility of shops. Suria KLCC also commenced the escalator modernisation in phases, providing enhanced safety features and reliability. With digital revolution redefining customer expectations, Suria KLCC launched its interactive website, upgraded its mall directories with targeted search content and introduced media and advertising screens and panels within the mall to facilitate retailers’ promotions.
Mandarin Oriental, Kuala Lumpur (MOKL Hotel) recorded a stronger performance in 2017, contributing 12% of KLCCP Stapled Group’s revenue. This was on the back of higher room revenue with the re-launch of the renovated Club rooms and Suites and improved demand from banqueting and the food and beverage segment. To face the future competition and stay ahead of the market, MOKL Hotel had embarked on an overall refurbishment of the hotel in phases, commencing 2011 and has to-date seen the completion of all parts of the hotel with the exception of the guestrooms.
During the year, MOKL Hotel completed the guestroom renovation comprising 157 Club Rooms and Suites, the Presidential Suite and 116 Deluxe rooms and Park Suites. We capitalised on the relaunch of these rooms in the second half of 2017 and these new offerings were well received resulting in increased revenues. Due to the changing market conditions, shifts in demand patterns and increasing competitive pressures, MOKL Hotel accelerated its expansion of network, redirected industry focus from its traditional reliance of oil and gas and banking sector clientele and stepped-up leisure growth from group bookings.
With these initiatives in place and the final phase of guestroom renovations underway and expected to be fully completed by end of this year, MOKL Hotel will be well positioned to offer guests a resolutely new hotel experience at a time when the hospitality industry is continuing to grow.
The management services segment comprising facilities management, car parking management and REIT management, which continues to complement the property portfolio, maintained its contribution of 10% of KLCCP Stapled Group revenue. This is mainly from the full year impact of the expansion of facility management services to properties in Kerteh, Terengganu, increase in car parking rates for the Northwest Development and Menara Dayabumi and the management of 882 new car park bays at Menara ExxonMobil. OUR LONG-TERM STRATEGIC FOCUS
KLCCP Stapled Group is focused on building long term value across its portfolio of assets and is driven by management excellence and strong financial discipline to create sustainable long-term value for all stakeholders. The resilience of KLCCP Stapled Group’s fundamentals, quality tenants and premium property location underpin its long-term value and drives sustainable returns.
The office segment is expected to remain stable with its solid 100% occupancy and long term leases. The retail landscape will continue to be beset by challenges though Suria KLCC’s strong catchment fundamentals and location within the iconic belt will continue to be well supported. MOKL Hotel will continue to operate in a challenging environment with intense competition coming on stream and the ongoing guestroom refurbishment throughout 2018. About KLCCP Stapled Group
KLCC Property Holdings Berhad (KLCCP) and KLCC REIT, collectively known as KLCCP Stapled Group is Malaysia’s largest self-managed stapled security that invests, develops, owns and manages a stable of iconic and quality assets.
KLCCP Stapled Group became the first ever Shariah compliant stapled structure in Malaysia upon the listing of KLCC Stapled Securities (KLCCSS) on 9 May 2013. As a constituent of the FBM KLCI Index, KLCCSS trades under the REIT sector of the Index as a single price quotation.
With a market capitalisation of RM15.6 billion as at December 2017, KLCCP Stapled Group constitutes 34% of the market capitalisation of the Malaysian REIT segment.
With KLCCP Stapled Group’s core business in property investment and development, the Group has a diverse property portfolio largely located within the Kuala Lumpur City Centre comprising prime Grade A office buildings, a premier retail mall and a luxury hotel. The stabilised and wholly-owned assets namely PETRONAS Twin Towers, Menara ExxonMobil and Menara 3 PETRONAS are under KLCC REIT and the non-wholly owned assets and assets with development and redevelopment potential, Suria KLCC, Mandarin Oriental, Kuala Lumpur hotel and a vacant land (Lot D1) are in KLCCP. KLCCP also has a 33% stake in Menara Maxis.
Two of KLCCP’s wholly-owned subsidiaries, namely KLCC Urusharta Sdn Bhd and KLCC Parking Management Sdn Bhd, are engaged in providing facility management services and car parking management services respectively. The REIT Manager who is engaged to manage and administer KLCC REIT is internal and resides within KLCCP as a 100% owned subsidiary.
KLCCP Stapled Group is continuously recognised for its excellence in the industry and has been included as a constituent of the FTSE4Good Bursa Malaysia Index and the FTSE4Good Emerging Index for demonstrating strong environmental, social and governance practices.
Investor Relations and Business Development DepartmentSOURCE : KLCC Property Holdings Berhad
FOR MORE INFORMATION, PLEASE CONTACT:
Name : Ms Bindu Menon
Head, Investor Relations and Business Development Department
KLCC Property Holdings Berhad
Tel: +603 2783 7391
Name : Ms Yasmin Abdullah
Investor Relations and Business Development Department
KLCC Property Holdings Berhad
Tel: +603 2783 7584