Hektar REIT completes KYSM acquisition, aims to double portfolio size by 2027

Kolej Yayasan Saad Melaka

KUALA LUMPUR: Hektar Asset Management Sdn Bhd, the manager of Hektar Real Estate Investment Trust (Hektar REIT), has announced the completion of the acquisition of Kolej Yayasan Saad Melaka (KYSM) for RM148.5 million, marking a pivotal moment in Hektar REIT’s strategic expansion and diversification efforts, being the first educational asset in its portfolio.

The acquisition of KYSM offers several advantages to Hektar REIT as the asset is secured under a 30-year quadruple net lease agreement, ensuring incremental revenue annually and an average yield of 8.0 per cent throughout the lease tenure.

The acquisition boosts Hektar REIT's assets under management by 12 per cent to RM1.38 billion and given that demand consistently exceeds the annual intake for placements at the college, Hektar REIT identifies further growth potential in the asset that can be unlocked, it said in a statement today.

According to the manager, the acquisition of KYSM is Hektar REIT’s first non-retail asset acquisition.

"Hektar REIT is in an active acquisition stage, looking to inject more income-generating assets and targeting to double our portfolio size to RM3.0 billion by 2027.

"Several assets are already in the pipeline for our consideration with the strategy to mix non-retail assets up to 20 per cent in our portfolio,” it said.

Hektar REIT is progressing with its growth strategy and is currently in active discussions with several parties regarding the next acquisition.

In selecting new assets, the manager said the REIT focuses on yield accretive assets that can provide sustainable and defensible recurring income, with particular interest in education and industrial assets.

Given their resilient nature to market movements, these sectors present opportunities for Hektar REIT to invest in.

For instance, the private sector education market size is expected to grow at a compound annual growth rate of 6.5 per cent-7.0 per cent with further capital gain moving forward based on market research.

KYSM has consistently ranked among the top 10 schools nationally for its Sijil Pelajaran Malaysia results and is renowned for excellence in both academic and co-curricular achievements since its establishment in 1995. - Bernama