KUALA LUMPUR (Aug 23): KIP Real Estate Investment Trust (KL:KIPREIT), which primarily invests in retail properties, is acquiring a 4,663-sq metre (100,416 sq feet) parcel of land in Gerik, Perak, for RM14.8 million, cash.

This marks the trust's third acquisition this year, after KIPMall Kota Warisan in Sepang and D’Pulze Shopping Centre in Cyberjaya.

In a bourse filing on Friday, KIP REIT said Pacific Trustees Bhd, acting as its trustee, has signed a conditional sale and purchase agreement with Bluebros Hypermarket Sdn Bhd for the acquisition.

The leasehold land, expiring in October 2112, includes a single-storey hypermarket, basement car park and office, totalling 60,895 sq feet of lettable area.

KIP REIT said the hypermarket is currently leased to TF Value-Mart Sdn Bhd, and the trust will enter into a new three-year triple net master lease with TF Value-Mart, featuring automatic renewals every three years and a 10% rental increase every three years.

The property, valued at RM15 million by Henry Butcher Malaysia, will be financed through bank borrowings, minimally impacting KIP REIT's financing ratio, which will remain below 5% of total audited assets.

KIP REIT said this acquisition will expand its portfolio to 12 assets, including seven KIPMalls, AEON Mall Kinta City and three industrial properties in Pulau Indah, Klang. Its net lettable area will increase from 2.08 million to 2.15 million square feet.

KIP REIT also expects to complete the acquisition of D’Pulze Shopping Centre by the first quarter of 2025.

"TF Value-Mart’s established brand and strong customer base will provide KIP REIT with a stable income stream," said KIP REIT chief executive officer Valerie Ong Pui Shan.

Ong said the trust will continue to focus on expanding investments in retail and industrial sectors to diversify and grow its portfolio, ensuring consistent income and strong returns for unitholders.

KIP REIT units closed half a sen or 0.56% lower at 90 sen on Friday, giving it a market capitalisation of RM550.6 million.