KIP REIT gets Bursa approval for placement linked to Setapak Central acquisition

PETALING JAYA (July 7): KIP Real Estate Investment Trust (KIP REIT) has obtained Bursa Malaysia Securities Bhd’s approval for the listing and quotation of up to 220 million new units under its proposed placement, a funding component for its previously announced RM435 million acquisition of Setapak Central Mall (pictured) in Setapak, Kuala Lumpur.

In its July 6 Bursa filing, KIP REIT said Bursa Securities had, via a letter dated July 3, approved the listing, subject to standard conditions.

KIP REIT had earlier appointed CIMB Investment Bank Bhd and Maybank Investment Bank Bhd as joint placement agents for the proposed placement and submitted its listing application to Bursa on June 3. With Bursa’s approval for the listing and quotation of the placement units now secured, KIP REIT can proceed with the proposed equity funding component, subject to unitholder approval and fulfilment of other conditions.

In a press release dated April 27, KIP REIT said Pacific Trustees Bhd, as trustee for and on behalf of KIP REIT, had entered into a conditional sale and purchase agreement to acquire Setapak Central, a leasehold three-storey shopping mall with a basement car park, for a purchase consideration of RM435 million.

The acquisition will be funded through a combination of bank borrowings and a private placement, broadly reflecting a 60:40 funding mix.

High-occupancy asset with portfolio uplift

The mall has a net lettable area (NLA) of 514,777 sq ft and recorded net property income of RM31.3 million for FY2025, implying a yield of about 7.2% on the proposed acquisition price.

Occupancy stood at 99.9% as at Feb 28, and the acquisition is expected to expand KIP REIT’s portfolio NLA by about 15.6% and become the trust’s 19th asset and largest by value.

The Setapak Central acquisition is expected to increase KIP REIT’s assets under management from about RM1.7 billion to RM2.1 billion, surpassing its RM2 billion assets-under-management target for 2027 ahead of schedule, and increase its market capitalisation to approximately RM1 billion.

The manager said the deal is expected to be distribution per unit (DPU)-accretive over the long term, in line with its strategy of delivering sustainable returns to unitholders.

Recent financial performance

For 3QFY2026, KIP REIT posted gross revenue of RM44.6 million, up 12.9% year-on-year, while net property income rose 17.6% to RM32.3 million and profit after tax increased 31.4% to RM18.2 million.

For the nine months ended March 31, gross revenue climbed 33.9% to RM128.9 million and cumulative profit after tax rose 47.5% to RM52.9 million. The trust proposed a third income distribution of 1.73 sen per unit, bringing year-to-date DPU to 5.23 sen.

KIP REIT’s portfolio currently comprises 18 properties — eight KIPMalls in suburban locations, six industrial assets in Pulau Indah, Port Klang, Cheras Jaya, Bintulu and Pasir Gudang, and four other retail assets including AEON Mall Kinta City in Ipoh, TF Value-Mart in Gerik, D’Pulze Shopping Centre in Cyberjaya and KIP Kuantan.

It has a total NLA of over 3.2 million sq ft, and was included in the FTSE4Good Bursa Malaysia Index in June 2025.

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