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AmFIRST REIT Q1 2026 Analysis: Occupancy Hits Decade High, But What’s Next?
AmFIRST Real Estate Investment Trust (REIT) has just kicked off its financial year with a promising first-quarter report for the period ending June 30, 2025. The results showcase a solid operational performance, marked by a significant boost in revenue and a portfolio occupancy rate we haven’t seen in a decade. This signals a potential turnaround that investors have been watching closely.
However, beneath the surface of strong top-line growth, a closer look at the financials reveals a more nuanced picture. Let’s dive into the key numbers and what they mean for the REIT’s path forward.
Core Financials: A Story of Growth
The first quarter has set a positive tone for the year. AmFIRST REIT reported a notable increase in its key financial metrics compared to the same quarter last year, driven by stronger leasing activity and operational efficiencies.
Q1 FY2026 (Ended 30 June 2025)
- Gross Revenue: RM27.0 million
- Net Property Income: RM16.2 million
- Profit Before Tax: RM3.3 million
- Realised Net Income: RM5.1 million
Q1 FY2025 (Ended 30 June 2024)
- Gross Revenue: RM25.0 million
- Net Property Income: RM14.6 million
- Profit Before Tax: RM3.2 million
- Realised Net Income: RM3.5 million
The 7.8% jump in gross revenue is particularly impressive. According to the report, this was fueled by improved occupancy at key properties like Menara AmBank, Wisma AmFIRST, and Prima 9. Higher car park income and a one-off compensation for a reinstatement liability waiver also contributed. Even more encouraging is the 45.4% surge in realised net income, which is a crucial indicator of a REIT’s ability to generate cash for distribution.
While property expenses saw a minor 2.9% increase due to maintenance costs, this was partially offset by lower electricity expenses, demonstrating some cost control.
Portfolio Performance: Leasing Momentum is Key
The standout story from this quarter is undoubtedly the portfolio’s occupancy rate. The overall committed occupancy soared to 88.8%, its highest level since 2014. This indicates that the REIT’s leasing strategies are bearing fruit in a competitive market.
| Property | Committed Occupancy (Jun 2025) | Committed Occupancy (Mar 2025) | Change |
|---|---|---|---|
| Menara AmBank | 78.2% | 73.7% | +4.5% |
| Wisma AmFIRST | 91.4% | 83.1% | +8.3% |
| Prima 9 | 77.1% | 62.2% | +14.9% |
| Prima 10 | 92.1% | 15.8% | +76.3% |
| Overall Portfolio | 88.8% | 82.5% | +6.3% |
The dramatic recovery at Prima 10 and the strong gains at other office towers highlight a successful effort to fill vacant spaces. Maintaining this momentum will be critical for sustained revenue growth throughout the year.
Financial Health: A Balancing Act
A deep dive into the balance sheet offers a check on the REIT’s financial stability. While the income statement looks strong, the gearing ratio remains a key area to monitor.
The REIT’s gearing ratio stood at 47.3% as of June 30, 2025. Gearing, which measures total debt against total assets, is a key indicator of financial leverage. While this level is within the regulatory limit, it is on the higher side and may constrain the REIT’s ability to take on new debt for future acquisitions.
On a positive note, the REIT is actively managing its interest rate risk. About 33% of its borrowings are hedged at a fixed rate, providing some stability against fluctuating interest rates. Furthermore, its interest coverage ratio—a measure of its ability to service its debt—has improved from 1.40 to 1.62 times, a healthy sign of better profitability covering interest payments.
Summary and Outlook
AmFIRST REIT’s first-quarter results for FY2026 paint a picture of operational recovery. The impressive growth in revenue, realised income, and, most importantly, the decade-high occupancy rate are significant achievements. These positive developments suggest that the REIT’s strategies to enhance its portfolio are yielding tangible results.
Looking ahead, the primary challenge will be to translate this operational success into sustainable financial strength. The management’s focus will likely be on maintaining leasing momentum, prudently managing its balance sheet, and navigating the broader economic landscape. While the report did not announce any dividend distribution for this quarter, the strong growth in realised income provides a solid foundation for future returns to unitholders. However, investors should remain aware of several key risks:
- Elevated Gearing: The 47.3% gearing ratio is close to the typical regulatory ceiling, which could limit future growth opportunities funded by debt.
- Interest Rate Exposure: With 67% of its debt on a floating rate, the REIT remains vulnerable to potential increases in interest rates, which could raise financing costs.
- Market Competition: The office and retail property markets, particularly in the Klang Valley, remain competitive, which could put pressure on rental rates in the future.
- Financial Volatility: The accounts showed an unrealised loss on derivatives, highlighting that non-cash financial instruments can impact the bottom-line profit figure.
As a blogger following the Malaysian REIT space, the operational turnaround is certainly commendable. The key question now is whether this momentum is sustainable and how management will address the high gearing level to ensure long-term stability and growth.
What are your thoughts on these results? Do you think AmFIRST REIT can maintain this growth trajectory for the rest of the year? Share your views in the comments below!
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