*Excluding fair value adjustment Performance Review For the Financial Year ended 31 December 2019, KLCCP Stapled Group recorded a sustained performance, registering an increase in revenue to RM1.4 billion, a growth of 1.2% Year-on-Year (YoY). The Group’s Profit Before Tax (PBT) increased to RM1.1 billion as compared to RM964.1 million in the preceding year, demonstrating the Group’s continued resilience in navigating the challenging market landscape.
In keeping with the Group’s steady performance and commitment to deliver value and growth, the Group distributed 38 sen per stapled security compared to 37 sen in 2018. This translates to a full year dividend payment of RM686 million to the holders of Stapled Securities, an increase of RM18.0 million from the preceding year.
The office segment continued to be the main revenue driver and largest contributor to the Group’s revenue at 42%, recording a revenue of RM597.3 million and PBT of RM479.8 million. The triple net lease arrangement particularly for PETRONAS Twin Towers, Menara 3 PETRONAS and Menara Dayabumi and the full occupancy of all buildings provided the Group with strong and stable earnings despite the challenges of oversupply in the office market during the year.
The Group secured a further 18 years lease for Menara Dayabumi contributing to the rental stability of the Group’s assets. The year’s focus was also on improving the office experience at Menara Dayabumi through the upgrading of facilities and amenities, creating a workplace environment which promotes better engagement and interaction. The Group has also completed the Workplace for Tomorrow (WFT) initiative by transforming specific areas in the workplace at all office buildings occupied by PETRONAS into the “office of tomorrow”.
The retail segment, represented by Suria KLCC and the retail podium of Menara 3 PETRONAS continued to boost the Group’s performance with a steady 2.5% YoY growth in revenue and a 2.3% increase in PBT. Despite the loss of eight months of income from the anchor-to-specialty space reconfiguration, Suria KLCC’s Total Moving Annual Turnover increased to RM2.67 billion for the year, reflecting the mall’s robust strategy in understanding customer needs and market trends.
The completion of the reconfiguration exercise, spanning a space of 120,000 square feet of Net Lettable Area (NLA) saw the entry of about 50 specialty stores comprising fashion, food and beverage (F&B) and cosmetics. Opened on 24 January 2020, the exercise has enabled Suria KLCC to broaden its retail mix of prominent local and international brands. Among the stores that made their entry during the year are Le Labo, Gucci Beauty’s first standalone boutique in Malaysia, Lululemon and the Louis Vuitton’s flagship store expansion. The re-opening of half of its food court at level 2 also added to the variety in dining experience for its customers.
Mandarin Oriental, Kuala Lumpur (MOKL Hotel) ended the year with a strong performance amidst the highly competitive hospitality market. MOKL Hotel recorded a 3.0% increase in revenue on the back of stronger demand from leisure supported by Meetings, Incentives, Conferences and Exhibitions (MICE) and banqueting events while PBT rose to RM0.7 million, from improved occupancy and demand in F&B.
2019 marked a full year of MOKL Hotel’s operation after a 7-year master plan refurbishment which was implemented in phases to rejuvenate the hotel in its quest to stay competitive and relevant. MOKL Hotel now offers a resolutely new experience to guests with the introduction of attractive F&B offerings and new spa treatments and wellness programmes. MOKL Hotel also launched its new loyalty program, “Fans of MO” which saw over 300,000 members registered and increased its brand exposure through digital marketing via their online platform, MO.com which improved room-nights growth.
The Group’s Management Services segment comprising facilities management and car parking management services registered a commendable increase in PBT of 11.3%. However, revenue dropped marginally to RM146.6 million as compared to RM146.7 million in 2018 mainly due to reduction in transient car count at the North West Development car park.
During the year, the Group embarked on the initiative to enhance the safety and security features within the KLCC Precinct, boosting customer experience via implementation of innovative technology. KLCC Parking Management Sdn Bhd (KPM) implemented the License Plate Recognition technology at the car park which enables vehicles’ license plate to be captured to intensify security at the car park. KPM also introduced ICONIK, a mobile phone application which features online ticket payment system, parking bays availability and services information. Todate, approximately 50% of KPM’s customers are using the cashless payment mode which include payment via credit and debit card.
Current Business Environment in Recovery Movement Control Order Our retail and hotel have opened and resumed business since 4
th May 2020 when the Conditional Movement Control Order (CMCO) was announced and with the recent enforcement of the Recovery Movement Control Order (RMCO), Suria KLCC is now fully opened while our hotel is progressively opening their F&B outlets and other hotel services. As the health and well-being of our tenants, customers and hotel guests are our utmost priority, we have put in place the necessary measures in ensuring a safe environment in terms of facility readiness which reinforces social distancing with enhanced safety procedures, to protect and to alleviate the safety and health concerns of our customers and hotel guests.
At our office buildings, we have also implemented the guidelines on safe work procedures throughout our buildings as a precautionary measure to protect our tenants and employees and to ensure compliance to the “New Normal” as tenants return to their offices.
Navigating a Challenging 2020 Whilst the challenging environment is expected to continue in 2020, in particular post Covid-19, the Group expects the performance of the office segment to remain stable, backed by the triple net lease agreements and long term leases. The Covid-19 pandemic has substantially impacted the hotel industry and the Group anticipates that the hotel segment will be adversely affected for the remaining quarters.
The retail segment will have the advantage of the latest offerings from the newly opened stores under the anchor-to-specialty reconfiguration exercise but will remain cautious in light of the prevailing challenging environment, taking into consideration the potential changes in consumer behavior and sentiments during this period.
“We are likely to feel the impact of Covid-19 for some time and consumer sentiment is expected to remain cautious across all business segments. Despite the uncertainties that lie ahead of us, the Group endeavours to remain resilient and will strive to navigate the challenges to continue to deliver long-term value to our holders of Stapled Securities. We will continue to seek growth opportunities and explore innovative solutions to elevate the experience of our tenants, shoppers and hotel guests whilst complying with the New Normal.” Datuk Hashim Wahir, Chief Executive Officer 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. KLCCSS trades as a single price quotation under the REIT sector on Bursa Malaysia and 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.
KLCCP Stapled GroupTwo 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.
Issued by:
Corporate Communications
Investor Relations and Business Development Department 23 June 2020
SOURCE : KLCC Property Holdings Berhad
FOR MORE INFORMATION, PLEASE CONTACT:
Name : Ms. Bindu Menon
Head, Investor Relations and Business Development
KLCC Property Holdings Berhad
Tel : +603 2783 7291
Email : bindu@klcc.com.my
Name : Ms. Yasmin Abdullah
Corporate Communications
Investor Relations and Business Development Department
KLCC Property Holdings Berhad
Tel : +603 2783 7584
Email : yasmina@klcc.com.my
--BERNAMA
