PETALING JAYA: KiP Real Estate Investment Trust (KiP REIT) has plans to diversify their portfolio based on yield rate and is looking for further acquisition of third-party assets following its successful takeover of Aeon Mall Kinta City in Ipoh.
KiP REIT chief executive officer Chan Heng Wah said during its second annual general meeting (AGM) in relation to the REIT’s geographical strategy that “we are exploring everywhere.”
He added: “It is all yield play. As long as it gives us good yield, and the property meets our criteria, we will consider it.
Its recent Kota Warisan asset under KiP Malls has been under operation since October 2017, and is currently at 85% average occupancy rate.
KiP group chief executive officer Valerie Ong said, “We have two more takeovers in the pipeline, one in Kuantan and another in Desa Coalfield Sungai Buloh.”
“The Kota Warisan, Kuantan and Desa Coalfield assets are already under construction, and the other two more are in the planning stage.
“KiP REIT also now holds five assets of the KiP Marts under the first right of refusal (ROFR) and are awaiting further agreements before it could be injected into their property portfolio.
Considering the RM208mil purchase of Kinta Mall, Chan said that the addition would translate into a 7.2% yield compared to the previous stipulated percentage of 6.9%.
The yield, however, still remains subject to the conditional precedents between the group and Kinta Mall’s vendors and would take either six to nine months to be fulfilled.
Occupancy rates for KiP Mart Melaka are currently at 70%.
“From the next month onward, we are bringing in a new tenant that specialises in home decor and this is expected to increase occupancy rate to 82%,” KiP REIT managing director Datuk Chew Lak Seong said.
The group is expecting the completion of the various asset acquisitions during their 2019 financial year.