KUALA LUMPUR: MRCB-QUILL Real Estate Investment Trust (MQREIT) registered a net profit of RM22.04 million in the second quarter ended June 2017, 43.2 per cent higher than RM15.39 million, a year ago, due to higher rental income.

In a filing to Bursa Malaysia today, MRCB Quill Management Sdn Bhd, the manager of MQReit, said the higher net income came from rental hikes from several properties and the recognition of income from Menara Shell.

After deducting higher finance costs and manager's fee, MQREIT’s property income saw a 35.8 per cent increment quarter-on-quarter.

With the books closure date being August 28, MQREIT’s distribution per unit of 4.23 sen is expected to be executed on September 18.

MQREIT highlighted the office market is expected to remain challenging with the slowdown of the global and domestic economies and low crude oil prices as well as the lack of catalyst to boost demand.

“While we expect that take-up rates in Klang Valley to be soft, we are working hard to step up our leasing efforts to ensure that the performance of MQREIT's portfolio remains stable in 2017,” it said.

MQREIT has a healthy balance sheet with an aggregate gearing of 37 per cent which is well below the Securities Commission regulatory limit of 50 per cent.

Its cost of debt stable at an average of 4.4 per cent per annum as at June 2017. The good thing is this year, MQReit has no refinancing requirements.

About 76 per cent of MQREIT’s borrowings are pegged at fixed rates, which offer greater certainty of interest expense in an event of a rising interest rate environment.

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