KJTS to let JV take over KIP REIT malls contracts

KUALA LUMPUR (May 8): KJTS Group Bhd (KL:KJTS) said on Friday that it has signed an agreement to let its joint venture take over a contract involving works for eight retail malls.

Under the agreement, Lestari Cooling Energy Sdn Bhd will assume the asset ownership and capital investment role for the project while KJTS will be responsible for retrofit, chilled water supply, and operations-and-maintenance of the malls, according to an exchange filing.

The revised structure reduces upfront capital commitments, enhances its balance sheet, and will allow the company to scale similar projects through Lestari that will act as a dedicated investment platform, KJTS said.

“As there will be more similar opportunities for the KJTS to duplicate this business model, the company needs to preserve its cash and credit position for future deals,” it said.

KJTS owns a 10% stake in Lestari Cooling and state-owned Retirement Funds Inc has 30%, while American investment firm Stonepeak will control 60% of the joint venture set up to develop district cooling and electricity distribution assets in Malaysia.

Last year, KJTS secured the contract that required RM25.27 million in capital expenditure from KIP Real Estate Investment Trust (KL:KIPREIT) to work on its seven malls. The contract was later expanded to eight malls in October 2025.

Retrofit works have since been done for five of the malls and one is targeted to be completed between May and July. Lestari Cooling is paying about RM19 million for the retrofit works of the six KIPMall sites, KJTS said.

Retrofit works for another two malls and associated cost amounting to about RM4 million will be borne by KJTS under the agreement. The operations-and-maintenance services and chilled water supply for all eight sites are expected to continue until July 2046.

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