KLCCP Stapled Group sees recovery in 2022 but business unlikely to return to pre-pandemic levels

KUALA LUMPUR (April 12): Petroliam Nasional Bhd (Petronas)-controlled real estate entity KLCCP Stapled Group hopes 2022 will be a better year for the property group, although business is unlikely to return to pre-Covid-19 levels during the year as business recovery from movement restrictions will take time, according to chief executive officer Md Shah Mahmood.

The group comprises KLCC Property Holdings Bhd and KLCC Real Estate Investment Trust (KLCC REIT). It represents a diversified office-focused REIT comprising five Grade-A offices, including the iconic Petronas Twin Towers, a retail mall and a luxury hotel within the Kuala Lumpur City Centre (KLCC).

At a press conference in conjunction with the annual general meeting here on Tuesday (April 12), Md Shah Mahmood said: “I hope it will be a good year, but I do not think it (business) will reach pre-pandemic levels.

“Things are going to take time. Different countries also handle their [Covid-19] endemic phases differently,” he added.

For Md Shah Mahmood, it is important to build confidence among consumers as KLCCP Stapled Group plans its business recovery from the impact of movement restrictions due to the Covid-19 outbreak that began in early 2020.

“For me, it’s important to build confidence among consumers. I hope this year (2022) will go better with all the things we are planning together, so we will have more colour in terms of business,” he explained.

According to KLCCP Stapled Group’s website, its real estate assets include the Suria KLCC retail mall and Mandarin Oriental Kuala Lumpur hotel.

Md Shah Mahmood said the return of office tenants since November 2021 is encouraging, and that such sentiment is expected to gradually boost retail and hotel operations.

“Suria KLCC will continue to deliver an unparalleled customer experience, bringing in first-to-market brands, to drive footfall and tenant sales. The mall had a 93% occupancy rate last year, which was higher than the industry average of 79.9%,” he noted.

He said Mandarin Oriental Kuala Lumpur will continue to focus on the domestic leisure market, and the hotel’s occupancy is expected to rise as global borders are reopened as Covid-19 vaccination progresses.

“Last year, occupancy [of the hotel] was 16%. With all the innovations and packages that Mandarin Oriental offers, we believe that the occupancy rate will increase even more in the future,” he added.

Under KLCCP Stapled Group’s stapled structure, ordinary shares in KLCC Property Holdings Bhd are stapled together with units of KLCC REIT.

National oil company Petronas owned a direct 2.261% stake in the group as at Jan 17, 2022, together with an indirect stake of 64.677% held via its wholly-owned KLCC (Holdings Sdn Bhd).

At the time of writing on Tuesday, KLCCP Stapled Group securities were trading unchanged at RM6.65, giving it a market capitalisation of about RM12.04 billion.