LIPPO Malls Indonesia Retail Trust (LMIRT) reported a 6.2 per cent increase in net property income to 352.1 billion rupiah (S$30.8 million) in Q1 2023 ended Mar 31, from 331.5 billion rupiah in Q1 2022.

Rental revenue fell 1.9 per cent to 317.1 billion rupiah in this quarter from 323.3 billion rupiah in the year prior. But gross revenue rose 3.5 per cent to 558.6 billion rupiah in Q1 2023 from 539.7 billion rupiah in Q1 2022.

In rupiah terms, the trust’s portfolio of properties reported stable operating performance on the back of improving operating conditions in Indonesia.

But due to the depreciation of the Indonesian currency against the Singapore dollar, LMIRT’s reporting currency, the trust reported declines in rental revenue and net property income. Rental revenue for Q1 2023 was S$27.8 million, down 9 per cent from S$30.5 million in Q1 2022. Net property income also fell 1.4 per cent to S$30.8 million in Q1 2023 from S$31.3 million in Q1 2022.

LMIRT’s cessation of distribution to perpetual securities holders in March 2023 has triggered the restriction in distribution to unitholders. This is an effort to address debt obligation in the next 12 months.

“We are also exploring asset recycling opportunities to divest our non-core non-strategic assets at reasonable market prices to boost our financial flexibility,” said James Liew, chief executive officer of the manager.

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The trust has reduced all rental support and reliefs to speciality tenants in view of the improving operating conditions, except for those in underperforming malls and restricted tenant leases.

High interest rates, volatile foreign exchange rates and ongoing geopolitical risks remain challenges in the current environment.

Units of LMIRT closed unchanged at S$0.017 on Thursday.