KIP Real Estate Investment Trust has entered into a conditional sale and purchase agreement with Bluebros Hypermarket Sdn Bhd to acquire a leasehold land for a purchase consideration of RM14.8 million. This acquisition it said was is in line with the aim to expand its retail asset investments that will continue to provide a sustainable business growth.
The land, in which the leasehold expires on 3 October 2112, is located in Gerik, Perak. The land spans 4,663 square metres where a single-storey hypermarket, basement carpark and an office, with a lettable area of 60,895 square feet is built upon it. The hypermarket is currently being leased by TF Value-Mart Sdn Bhd (“TF”). Pursuant to the SPA, KIP REIT will enter into a new triple net master lease agreement with TF for a fixed period of three years, with an automatic renewal of four consecutive terms of three years each with a rental reversion of approximately 10% every three years of the tenancy period. Notwithstanding the reversions, the rental is expected to provide an annual yield of 7.5%. This property, valued at RM15.0 million by Henry Butcher Malaysia, will be funded through bank borrowings. Nonetheless, the impact on its financing ratio is negligible with the ratio remaining less than 5% of the audited total assets.
TF is a Malaysian hypermarket chain that offers a wide range of products, including fresh produce, groceries, and general merchandise. TF currently operates 47 outlets across Malaysia, including Pahang, Kelantan, Negeri Sembilan, Kedah, Penang, Perak, Kuala Lumpur, Selangor, and Johor.
The acquisition will expand KIP REIT’s total portfolio to 12 assets, which includes 7 KIPMalls, AEON Mall Kinta City, and the 3 existing industrial properties in Pulau Indah, Klang. Accordingly, the total net lettable area will increase from the current 2.08 million square feet to 2.15 million square feet. KIP REIT is also in the midst of acquiring D’Pulze Shopping Centre, which is slated for completion by first quarter of 2025. KIP REIT remains committed to creating a robust and diversified real estate investment platform, aimed at providing stable, long-term income and generating attractive returns for its unitholders.
