KIP REIT buys KIPMall Kota Warisan for RM80m, proposes private placement to raise up to RM10m

• The acquisition, which is expected to be completed by the first quarter next year, will expand the KIP REIT’s portfolio to 11 assets. Currently, it has seven KIP Malls in Bangi, Tampoi, Kota Tinggi, Masai, Senawang and Melaka, as well as AEON Mall Kinta City in Ipoh, and three industrial properties in Pulau Indah.

KUALA LUMPUR (June 16): KIP Real Estate Investment Trust (KIP REIT) is buying KIPMall Kota Warisan in Sepang, Selangor for RM80 million cash.

Pacific Trustees Bhd, on behalf of KIP REIT, inked a conditional sale and purchase agreement with Cahaya Serijaya Sdn Bhd on Friday (June 16) to acquire the shopping mall.

The exercise is deemed as a related-party transaction, as Datuk Ong Kook Liong is a director and major shareholder of Cahaya Serijaya, as well as the managing director and a major unitholder of KIP REIT.

The acquisition, which is expected to be completed by the first quarter next year, will expand the KIP REIT’s portfolio to 11 assets. Currently, it has seven KIP Malls in Bangi, Tampoi, Kota Tinggi, Masai, Senawang and Melaka, as well as AEON Mall Kinta City in Ipoh, and three industrial properties in Pulau Indah.

At the same time, KIP REIT is planning a private placement to raise up to RM10 million — based on the illustrative issue price of 81.5 sen per unit for the issuance of a maximum of 12.27 million placement units — to partially fund the acquisition.

Other sources of funding include bank borrowings (RM47.93 million), as well as unutilised proceeds raised from the previous private placement exercise (RM22.24 million).

“With this acquisition, KIP REIT’s total assets under management will cross the RM1 billion mark. This is a huge achievement, and paves the way for us to grow further. We continue to aggressively look for community-centric retail assets, as well as industrial assets that will add value to KIP REIT, as we remain steadfast in delivering long-term value to our unitholders,” said the REIT's executive director cum chief executive officer Valerie Ong Pui Shan in a statement.

KIP REIT closed unchanged at 90 sen on Friday, with a market value of RM545.72 million.