PETALING JAYA: KLCCP Stapled Group, which consists of KLCC Property Holdings Bhd and KLCC Real Estate Investment Trust, has a positive outlook for 2023 through the rolling out of its three-pronged growth strategy to ensure long-term sustainability.

The group plans to expand on the core real estate segment through an increase in property investments, enhancing its integrated business model as well as stepping out building capabilities for future growth.

KLCCP and KLCC Real Estate Investment Trust chief executive officer Datuk Md Shah Mahmood said the group is confident in its investment portfolio, adding that the three-pronged strategy and targets will spur further development and position it well into 2023.

He also said the group will take into account the macroeconomic, geopolitical uncertainties and challenging property market.

With the majority of countries recovering from the pandemic and fully reopening their borders, the group also expects that it will have a good impact on hotel occupancy and retail spending.

Md Shah said despite international borders being partially closed in 2022, Suria KLCC’s performance achieved the highest tenant sales, outpacing pre-pandemic levels by 9.5%, mainly contributed by locals.

“In terms of percentage, the ratio for locals to tourists that visited Suria KLCC in 2022 is 70:30 and sometimes 80:20 accordingly,” he added.

As for the hotel segment, after accounting for customer exclusivity and offerings, the group is confident that Mandarin Oriental will maintain its competitiveness in the hotel industry.

For the groups’ office segment, Petroliam Nasional Bhd (PETRONAS) recently renewed its contract with the Twin Towers and Menara 3 PETRONAS by taking a triple net lease, which will be valid until 2042.

Md Shah said the group managed to retain its rental rate for offices as there was an incremental increase in its asset value in 2022, which was RM15.7bil.

Meanwhile, with the construction of the new MRT, a new retail podium – Lot L, L1 and M – will continue to be developed and is expected to be completed by 2024, boosting footfall traffic to the area.

In line with that, KLCCP will focus on improving the aesthetics of the park for people to enjoy their walk to Suria KLCC or to the fountain esplanade area.

The strategy by KLCCP is expected to take around five years toward achieving its short-term target.

For its fourth quarter ended Dec 31, 2022, KLCCP’s net profit rose to RM782.66mil from RM495.85mil in the previous corresponding period, while revenue grew to RM1.46bil from RM1.17bil previously.

In its notes on its latest financial performance, KLCCP said signs of the economy gradually improving have been observed since the recovery of businesses in early 2022.

“This trend is anticipated to continue into the year 2023. However, headwinds such as inflationary pressures, raising labour cost and the lingering Covid-19 cases will remain as part of the backdrop,” it said.

Source: KLCCP unveils growth strategy | The Star