KLCCP sees stable office segment but challenging times for hotel
KLCCP Stapled Group expects the office segment to remain stable on the back of locked-in long-term leases with high-quality tenants.
It said yesterday the retail segment is also expected to remain stable with Suria KLCC continuing its tenant remixing exercises and completing the formation of luxury men’s and women’s zones to enhance the customer shopping experience.
As for the hospitality segment, it would continue to operate in a challenging environment, though Mandarin Oriental will position itself with its high standards of service and relaunch of the Club Rooms and Suites by mid-year.
“Amid the adverse operating environment, KLCCP Stapled Group took cognisance of its collective strength and focused on creating differentiations.
“We reposition our assets and services to compete on our potential and quality to sustain and deliver results,” said KLCCP Stapled Group CEO Hisham Wahir.
KLCCP Stapled Group recorded a marginal dip in the profit attributable to equity holders amid consistent top-line revenue for last year.
It distributed 95 per cent of its overall distributable income with a distribution per stapled security of 35.65 sen, a 2.9-per-cent increase from 2015.
The group’s performance was underpinned by the resilient office and retail segments, which were offset by the significant decline in the hotel segment during a year of sluggish domestic consumption-led economic growth as well as weaker market demand in the hospitality sector.
The office segment comprising Petronas Twin Towers, Menara 3 Petronas, Menara ExxonMobil and Menara Dayabumi continued to provide strong asset stability underlined by high occupancy and long-term leases.
It remained the major contributor to the group’s revenue with a 44-per-cent contribution.
The retail segment, comprising Suria KLCC and the retail podium of Menara 3 Petronas, retained its 35-per-cent share of group revenue.
This was on the back of higher rental rates from new tenants and rent reviews becoming effective during the year.
The hotel segment, represented by Mandarin Oriental Kuala Lumpur, saw a decline in its contribution to group revenue from 12 per cent in 2015 to 11 per cent.
This was mainly due to the significant impact of softer corporate demand, increased competition from new luxury or boutique hotels coupled with renovations to guestrooms.
