KIP REIT is acquiring its first industrial assets. (Photo: Google Maps)KIP REIT is acquiring its first industrial assets. (Photo: Google Maps)

KIP REIT is marking its maiden acquisition of industrial properties with a three-asset buy worth some MYR78.7 million.

The REIT, which presently has a portfolio of seven retail malls across Malaysia, is acquiring three industrial assets in Pulau Indah.

The assets are being acquired from Hextar Chemicals Sdn Bhd, Hextar Industrial Chemicals Sdn Bhd and Teju Logistics Sdn Bhd, respectively.

Based on the date of an independent valuation on 20 June 2022, the aggregate market value of the properties is MYR78.9 million.

The acquisition will add approximately 350,000 square feet of lettable area into KIP REIT’s portfolio.

The properties will be leased to related companies of the Hextar group on a triple net lease basis for a fixed period of 15 years from the date of sale completion.

The total initial annual rent is about MYR5.1 million with built-in agreed rental escalations of 13% scheduled on Year 4, Year 7 and Year 11.

The proposed acquisitions are deemed to be related party transactions and are subject to the approval of the unitholders of KIP REIT at a general meeting to be convened.

“The proposed acquisition will be our maiden acquisition of industrial assets in line with our amended investment policy as at 29 September 2020”, said the Executive Director of KIP REIT’s manager, Dato’ Ong Kook Liong.

“While we will continue to manage all our retail-focused assets, we will also continue to explore growth opportunities in the industrial and warehousing sub- sectors to grow our income based investment portfolio of industrial assets”, he added.

KIP REIT was last done on the Bursa Malaysia at MYR0.88.

By Shariffa Al-Habshee

Shariffa joined REITsWeek in 2017, and monitors Asia-Pacific REITs for the publication.