By Sharen Kaur, Published in NST Property, June 16, 2020
YTL Hospitality Real Estate Investment Trust (YTL Hospitality REIT) says the Covid-19 pandemic has adversely impacted the group's operations but it remains confident of the long term prospects of the hospitality sector.
The World Health Organization declared the Covid-19 outbreak a global pandemic while the International Monetary Fund (IMF) adjusted global economic growth projection to contract by three per cent this year, much worse than the 2008/2009 global financial crisis.
"The unprecedented pandemic has adversely impacted the tourism, travel, and hospitality industries worldwide and business recovery is expected to take a longer period given the uncertainties and challenges that are ahead.
"Notwithstanding the short term challenges, the Manager (Pintar Projek Sdn Bhd) remains confident of the long term prospects of the hospitality sector," it said in a filing with Bursa Malaysia today.
As at March 31, 2020, YTL Hospitality REIT has 15 properties under its portfolio, worth RM4.62 billion. It operates 10 luxury hotels and serviced residences in Malaysia, three in Australia and two in Japan,
For the nine months ended March 31, 2020, YTL Hospitality REIT recorded revenue and net property income (NPI) of RM356.67 million and RM190.94 million, respectively, as compared to RM372.24 million and RM193.02 million, respectively, recorded in the same period a year ago. This represented a decrease of 4.18 per cent and 1.08 per cent respectively.
The group recorded a pre-tax profit of RM135.16 million for the nine months, an increase of 61.19 per cent as compared to a pre-tax profit of RM83.85 million recorded in the preceding year corresponding period, mainly due to the unrealised foreign currency translation gain on borrowings denominated in foreign currencies.
The increase in revenue and net property income was mainly due to the additional rentals recorded from JW Marriot Hotel Kuala Lumpur following the refurbishment completed in June 2019.
Additionally, the acquisition of The Green Leaf Niseko Village in Japan in September 2018 contributed to the increase in revenue and net property income for the current financial period ended March 31, 2020.
Pintar Projek executive chairman Tan Sri Francis Yeoh Sock Ping said that revenue and NPI from the Sydney Harbour, Brisbane, and Melbourne Marriott hotels in Australia were impacted by the Covid-19 pandemic from February 2020.
"Australia's borders were closed to all non-residents from March 20, 2020, as the government implemented stricter social distancing measures to contain the pandemic. However, the three hotels participated in the Australian government's programme for self-isolating guests and remained in operation throughout, and we took immediate measures to review business continuity plans, tighten cost-saving measures and delay non-essential capital expenditures to mitigate the financial impact."
In Japan, the Japanese government declared a one-month state of emergency in April 2020, which was extended to May 31, 2020. The lifting of the state of emergency was declared on May 25, 2020 as the implementation of emergency measures is deemed no longer necessary.
In a separate announcement, YTL Hospitality REIT said that Pintar Projek has carried out revaluations of its real estate assets in Japan and Australia.
The assets are Hilton Niseko Village, The Green Leaf Niseko Village, Sydney Harbour Marriott, Brisbane Marriott, and Melbourne Marriott.
All the assets, except for The Green Leaf Niseko Village had decreased in market value. The decrease, however, was marginal.
The revaluations decreased the unaudited net asset value per unit of YTL REIT and its subsidiaries from RM1.6028 per unit as at April 30, 2020 (before the revaluations) to RM1.5030 per unit upon incorporation of the aggregate revaluation decrease of RM170.103 million.
The revaluations of YTL REIT's remaining real estate assets in Malaysia are being carried out and will be announced in due course, it said.
The different valuation dates were necessitated by the Malaysian Movement Control Order which were introduced on March 18, 2020.
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