KUALA LUMPUR (May 27): KIP Real Estate Investment Trust (KL:KIPREIT), which mainly manages retail properties, said on Monday it plans to acquire seven-floor DPulze Shopping Centre for RM320 million.

The acquisition, which will enlarge its total assets by nearly 34% to RM1.29 billion, will be funded by combination of bank borrowings and proceeds from a planned private placement, KIP REIT said in an exchange filing.

The placement involves a sale of up to 180 million new units through bookbuilding. KIP REIT managing director Ong Kook Liong has pledged to take up as much as 15 million placement units, it noted.

Based on illustrative price of RM0.815, the private placement could raise up to RM146.7 million. As of end-March 2024, KIP REIT's cash amounted to RM27.52 million, while borrowings stood at RM388.70 million, its latest financial statement showed.

The acquisition, which is the REIT's largest acquisition since its listing on the Main Market of Bursa Malaysia in 2017, is scheduled to be completed by the first quarter of 2025.

“We were presented with this opportunity as one that enhances the strength of our retail asset portfolio, aligning with our strategy [to be] a part of Malaysia’s leading real estate, which focuses on community-centric neighbourhood shopping malls,” said KIP REIT executive director and chief executive officer Valerie Ong Pui Shan.

She told this to the press after signing the sale and purchase agreement for the acquisition with the seller, DPulze Ventures Sdn Bhd. DPulze Ventures' shareholder-directors are Kan Ah Chun and Ng Choo Hai.

Located in the heart of Cyberjaya's major commercial area and near the newly opened Mass Rapid Transit Putrajaya line, DPulze Shopping Centre, which is fully occupied, generated RM22.84 million in net property income as of April 2024, for the financial year ended Jan 31, 2024 (FY2024).

Its anchor tenants are Jaya Grocer and TGV Cinema. Other well-known retailers are Celebrity Fitness, Starbucks, Sushi King, Guardian, The Body Shop, MPH Bookstores, Yamaha Music School and Skechers.

Besides retail properties, KIP REIT is also looking at potential industrial assets to achieve its RM2 billion assets under management (AUM) in the next three years.

As negotiations are still ongoing, the REIT did not elaborate on the potential acquisitions.

“We are keeping our options open. At the moment, we are looking mostly at Peninsular Malaysia. But we are also keeping our options open for East Malaysia,” Valerie said.

Just three months ago in February, KIP REIT completed its RM80 million acquisition of KIPMall Kota Warisan in Sepang.

As at end-March 2024, KIP REIT’s AUM stood at RM1.06 billion, comprising 11 properties — three industrial properties in Pulau Indah; seven KIPMalls in Bangi, Tampoi, Kota Tinggi, Masai, Senawang, Melaka and Kota Warisan; and the AEON Mall Kinta City in Ipoh.

At the time of writing, KIP REIT's units were trading half a sen or 0.56% higher at 89.5 sen, valuing the group at RM550.58 million.