KUALA LUMPUR (Jan 26): Sentral REIT recorded a marginal decline in net property income for the fourth quarter of FY2025, primarily due to higher operating expenses and accounting adjustments related to lease recognition under MFRS 16.
For the three months ended Dec 31, 2025, the office-focused real estate investment trust reported NPI of RM35.5 million, representing a 3.4% decrease compared with the same period last year. Revenue eased by 1.8% to RM47.4 million, while property operating expenses increased to RM11.9 million.
According to Sentral REIT, revenue was impacted by the straight-lining of lease income over the tenancy period in compliance with MFRS 16. This was partially offset by stronger contributions from selected assets, including Platinum Sentral, Lotus’s Building in Penang and Plaza Mont Kiara.
The increase in operating expenses was mainly attributed to one-off repair and equipment replacement works carried out at certain properties within the portfolio.
Despite the softer earnings performance, portfolio occupancy remained steady at 86% as at end-December, reflecting relatively stable demand for well-located office space in Kuala Lumpur and key Selangor business districts.
The REIT declared a final distribution per unit of 2.99 sen, payable on Feb 27. For the full financial year, NPI declined 3.4% to RM145.3 million, while revenue fell to RM190.8 million. Full-year DPU came in at 6.15 sen, slightly lower than the previous year.
Looking ahead, Sentral REIT expects tenant-favourable market conditions and rising operating costs to continue exerting pressure on the Klang Valley office market. This trend remains relevant for landlords and investors monitoring office space in Bukit Jalil, KL city centre and other established commercial locations.
In contrast, the retail segment is expected to maintain stability, supported by consistent domestic spending and increased tourist arrivals, despite ongoing cost pressures faced by retailers.
The REIT manager said it will continue to prioritise active asset management, including cost optimisation and targeted asset enhancement initiatives, to preserve competitiveness and improve overall portfolio quality. The trust also remains focused on disciplined capital deployment, targeting yield-enhancing acquisitions across diversified commercial property in KL and Selangor, while selectively divesting non-core assets when opportunities arise.
Units in Sentral REIT closed 0.6% higher at 80.5 sen, valuing the trust at approximately RM962.4 million.
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