Artist impression of the upcoming asset enhancement initiative at KIPMall Tampoi, slated for completion by 1QFY26
KUALA LUMPUR: Unitholders of KIP Real Estate Investment Trust
(REIT) have given the green light at its extraordinary general meeting (EGM) for the RM118mil acquisition of four retail properties in Kuantan and Selangor as well as a RM132mil private placement to fund part of the purchase and subsequent enhancements.
The target properties comprise KIPMall Desa Coalfields, Lotus’s Indera Mahkota, and two commercial buildings within an integrated development in Kuantan, which are projected to contribute a combined revenue of RM11.3mil and net property income of RM8mil in the first full year of operations.
According to KIP REIT, this is equivalent to 11.7% and 11.6% of the group’s 9MFY2025 revenue of RM96.2mil and net property income of RM68.8mil respectively, highlighting the strong earnings accretion potential of the expansion.
The newly acquired assets are expected to deliver an average initial yield of 6.8%, underpinned by long-term lease structures.
With the purchase of the assets, KIP REIT's total portfolio value is expected to hit RM1.6bil while its properties will span a net lettable area of over 3.4 million sq ft.
Concurrently, KIP REIT's private placement has entered its book-building phase, with price-fixing targeted for mid-August 2025.
The exercise will see the placement of up to 160 million new units with an aim to raise gross proceeds of about RM132mil.
Of the proceeds, the bulk or RM106.6mil will go towards partial settlement of the acquisitions. RM21.9mil will be used for asset enhancement initiatives at KIPMall Tampoi and the remaining RM3.9mil for estimated expenses.
“We are grateful for the strong support from our unitholders. This expansion strengthens our retail income portfolio, enhances earnings visibility, and supports sustainable DPU accretion.
"The new assets contribute meaningful recurring income and strengthen our presence in key suburban and emerging growth areas such as Selangor and Kuantan,” said KIP REIT CEO Valerie Ong.
