The manager of LMIRT has reported distribution per unit of 0.07 cents for 3QFY2020 ended September, down 87.5% from the 0.56 cents a year ago.
Q-o-q, 3QFY2020 DPU fell 36.3%.
Total gross revenue for the quarter fell 58.3% y-o-y to $28.9 million. In rupiah, gross revenue fell 56.4% y-o-y to RP310.1 million.
Q-o-q, LMIRT saw total gross revenue climb 5.4%.
See also: Lippo Malls Indonesia Retail Trust to acquire flagship asset for $330.2 mil
Gross rental income (GRI) fell 61.1% y-o-y to $15.3 million or 59.4% y-o-y to RP164.0 million.
The lower figures were mainly attributable to the temporary closure of retail malls and spaces at end March amid the Covid-19 outbreak. The drop in GRI was also due to the expiry of master leases in Lippo Mall Kemang on Dec 16, 2019, resulting in a $2.7 million decrease for the quarter.
The malls and spaces have gradually reopened since mid-May.
By July 3, all 21 retail malls and seven retail spaces under LMIRT have resumed operations with shorter operating hours.
During the mall closures, the REIT’s tenants were not charged rents save for tenants in essential services, and tenants who opted to remain open during the closures.
The quarter’s GRI was also affected by the distribution of additional rental reliefs to selected key tenants. Pending the completion of the rental relief negotiations, such key tenants were either billed partially, or not billed at all in the quarter.
The move was done to avoid the REIT incurring non-refundable final tax liabilities which are paid on a monthly basis.
Most of the negotiations, were, however, completed in October 2020.
Accordingly, 3QFY2020 net property income (NPI) fell 70.2% y-o-y to $13.1 million.
Taking into account fixed and financing costs, LMIR Trust recorded nil distributable income for 3QFY2020.
Distribution to unitholders for the quarter fell 87.5% y-o-y to 2.0 million after taking into consideration restrictions imposed under the terms and conditions of the US$250.0 million ($341.5 million) 7.25% guaranteed senior notes maturing in 2024.
As at Sept 30, LMIRT has a portfolio occupancy of 85.5%, higher than the industry average of 79.5% with a weighted average lease expiry (WALE) of 3.4 years by net lettable asset (NLA).
Year-to-date rental reversion has remained positive at 4.4%.
“Amid the challenges arising from the coronavirus outbreak in Indonesia, we have been able to gradually re-open for business while adhering strictly to health protocols and safe distancing measures,” says James Liew, CEO of the manager.
“With operating hours being shortened from 12 hours to eight hours and capacity capped at 50%, we have extended reliefs on rental and service charges to all tenants to support their business recovery. Certain tenants such as the entertainment outlets remain closed, and these continue to receive rental waivers from us,” Liew adds.
LMIRT says it expects retail malls in Indonesia to remain subject to shorter opening hours, capacity caps and ad-hoc restrictions with the ongoing Covid-19 situation in the country.
“To ensure sustainable distribution going forward, the significance and underlying solid fundamentals of the proposed acquisition of the iconic Lippo Mall Puri is even more important today as when this acquisition was originally communicated in March 2019,” notes Liew.
“The acquisition provides a steady and accretive stream of income with a guaranteed NPI until 2024. In addition, the strategic benefit of the associated rights issue will unlock the distribution restrictions currently imposed by the US-dollar notes.”
As at 3.07pm, units in LMIRT were trading 0.1 cent lower or 1.2% down at 8.3 cents.
