PETALING JAYA: KIP Real Estate Investment Trust
’s (KIP-REIT) earnings are expected to strengthen in the coming quarters.
This comes as its newly acquired KIPMall Setapak begins contributing a full quarter of rental income, offsetting higher financing and operating costs.
The RM435mil acquisition – completed on Sept 30, 2026 – marks KIP-REIT’s first entry into Kuala Lumpur.
Based on its financial year 2025 (FY25) net property income of RM31.3mil, the acquisition implies a net property income yield of 7.2%.
KIP-REIT’s realised net profit for the first quarter of FY27 stood at RM17.4mil, down 0.4% year-on-year and 13.8% quarter- on-quarter, accounting for 19% of TA Research’s full-year forecast and 20% of consensus estimates.
TA Research deemed the results to be within expectations.
The research house pointed out that the acquisition of KIPMall Setapak was completed only on Sept 30, 2026, contributing just one day of income during the quarter.
The mall’s first full quarter contribution will start from the second quarter of FY27 onwards.
“Management remains positive on KIP-REIT’s outlook, supported by the healthy performance of its existing portfolio and continued focus on leasing and operational improvements.
“With KIPMall Setapak contributing its first full quarter from the second quarter onwards, management expects the enlarged portfolio to strengthen recurring income and support distributable income growth,” TA Research said in a report.
The research house added that going forward, the focus will be on maximising the earnings potential of the enlarged portfolio through proactive leasing, tenant-mix optimisation, targeted asset enhancement initiatives and greater operating efficiencies, while maintaining prudent capital management.
KIP-REIT will also continue to evaluate growth opportunities across retail and industrial assets.
TA Research maintained a “buy” recommendation on KIP-REIT with an unchanged target price of RM1.18 per unit, based on a 2027 target yield of 6.75% and a 3% environmental, social and governance premium.
Meanwhile, CIMB Research said FY27 earnings should also benefit from a full-year contribution from KIPMall Tampoi – which reopened on Feb 8, 2026 – together with FY26 acquisitions.
Furthermore, these include KIPMall Desa Coalfields, KIPMall Kuantan, and the two industrial properties in Bintulu and Pasir Gudang.
“We raised our FY27 and FY28 core net profit forecasts by 18% and 25% to RM87.6mil and RM95.6mil, respectively, to account for nine months of contributions from KIPMall Setapak in FY27 and a full-year contribution in FY28, after factoring in higher financing costs,” CIMB Research said.
However, following the enlargement of its unit base to 1.16 billion units, CIMB Research lowered its FY27 distribution per unit (DPU) forecast by 11% to 7.2 sen and revised its FY28 DPU forecast to 7.7 sen.
While it maintained a “buy” recommendation, the research firm lowered its discounted distribution model-based target price to RM1.08 from RM1.11, reflecting a higher cost of equity assumption.
KIP-REIT currently has a total net lettable area of over 3.8 million sq ft and total properties valued at approximately RM2.2bil.
