Neutral on MAHB’s new rental model initiatives

Earlier this week, MAHB unveiled plans to combat difficulties faced by its partners due to a decline in passenger traffic. — Bernama photo

KUCHING: Analysts remained neutral on Malaysia Airports Holdings Bhd (MAHB) after the airport operator said will introduce a new rental model as part of its ongoing efforts to retain and attract new business partners.

Earlier this week, MAHB unveiled plans to combat difficulties faced by its partners due to a decline in passenger traffic.

Existing tenants who had signed up or are going to sign up under the ongoing airport commercial reset programme will benefit from a rental reduction of up to 30 per cent from the current rate, equivalent to a total annual savings of RM45 million for the participating tenants.

AmInvestment Bank Bhd (AmInvestment Bank) said the initiatives will translate into dents of RM45 million (from the 30 per cent rental rebates under the commercial reset programme) and RM22 million (from the temporary rental rebates of 50 per cent) to MAHB’s budget, which make up less than three per cent of the research firm’s FY20F revenue assumption.

“We maintain our forecasts as we have already assumed certain rebates to its tenants, in line with the practice in the industry during the pandemic,” it said in a report yesterday.

“We continue to like MAHB as we believe the air travel and tourism industries will gradually return to their growth path post-pandemic.”

AmInvestment Bank affirmed that MAHB remains a good proxy given its dominance in the airport segment locally, and its significant market share in Turkey.

“Given its strategic position in the economy, we believe it warrants stronger support from various stakeholders that should help to tide it through the pandemic and the current downturn in the air travel market,” it added.

Since 2018, MAHB had embarked on a commercial reset initiative at its international airports to revitalise the retail experience and this new rental model will ensure the right brands are present at the airport regardless of the impact of Covid-19.

Meanwhile, MAHB had also come up with a RM22 million relief package to help airport retailers weather the impact of Covid-19.

Under the relief package, about 650 retail tenants or 80 per cent of the retailers will enjoy a 50 per cent rental reduction for six months.

They are mainly made up of either small or medium-sized entrepreneurs or small to mid-scale operators who will be able to gain some respite in terms of cash flow so that they can continue operating.

 

The post Neutral on MAHB’s new rental model initiatives appeared first on Borneo Post Online.

from Borneo Post Online https://bit.ly/3gSAlVq
via IFTTT