Hektar REIT to buy 42 acres of land in Melaka for RM40m

• In a filing with Bursa Malaysia, the REIT said its trustee, MTrustee Bhd, is purchasing the land located in the Durian Tunggal sub-district from KYS College Sdn Bhd.

KUALA LUMPUR (July 11): Hektar Real Estate Investment Trust (KL:HEKTAR) said it has entered into a deal to buy two parcels of leasehold land in Melaka, totalling 41.8 acres, for RM40 million.

In a filing with Bursa Malaysia, the REIT said its trustee, MTrustee Bhd, is purchasing the land located in the Durian Tunggal sub-district from KYS College Sdn Bhd.

MTrustee has also entered into 30-year lease agreements with KYSA Education Sdn Bhd, the operator of Kolej Yayasan Saad (KYS), a fully residential private school in Melaka founded by businessman Tan Sri Halim Saad.

The leases follow a triple net structure with a 10% rental escalation every three years, and an option to extend for another 30 years or until the end of the leasehold period.

It is noteworthy that Hektar REIT completed the RM150 million acquisition of KYS last year, marking its first non-retail investment.

The latest transaction is deemed a related-party deal, as Halim’s daughter, Nor Sabrina Halim, sits on the board of Hektar Black Sdn Bhd, a major unitholder of Hektar REIT.

According to the REIT, the first parcel, measuring 6.3 acres, is located along the North-South Expressway with direct access to the main road. It has been earmarked by the vendor for future development to strengthen the KYS brand.

The second parcel, measuring 35.5 acres, forms part of a larger 121.53-acre tract. Hektar REIT previously acquired 86 acres from this site, which houses academic, administrative and student facilities for the KYS campus.

Hektar REIT said the acquisition and lease are in line with its long-term strategy of delivering sustainable income to unitholders by investing in high-quality, income-generating assets.

The REIT added that while the current deal involves land only, it sets the foundation for a phased investment plan. Upon completion of future development by the lessee, it may consider acquiring the completed buildings—potentially enhancing rental income based on gross floor area.

“This would boost long-term earnings and strengthen portfolio diversification through increased exposure to the resilient and growing education sector,” the REIT said.

The acquisition will be funded through a mix of internal funds and borrowings, with RM24 million expected to come from financing. The deal is expected to be completed in the fourth quarter of this year.

Hektar REIT units closed unchanged at 44 sen on Friday, valuing the trust at RM312.1 million.

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