This article first appeared in Capital, The Edge Malaysia Weekly on June 9, 2025 - June 15, 2025

PARADIGM Real Estate Investment Trust (REIT), managed by Paradigm REIT Management Sdn Bhd, is slated to list on the Main Market of Bursa Malaysia on June 10, with a market capitalisation of RM1.6 billion.

As its initial public offering (IPO) did not involve the issuance of new units, the trust itself will not receive any of the proceeds of RM560 million based on the final price of RM1 per unit. Total proceeds will go to WCT Holdings Bhd (KL:WCT), the sponsor of the REIT.

Upon listing, property tycoon Tan Sri Desmond Lim Siew Choon will have an indirect interest of 60.7% in Paradigm REIT through his interests in WCT. This is the second REIT to be controlled by Lim, the first being Pavilion REIT (KL:PAVREIT).

Paradigm REIT has three shopping malls with a combined value of RM2.4 billion. They are Bukit Tinggi Shopping Centre in Klang and Paradigm Mall Petaling Jaya — both in Selangor — and Paradigm Mall Johor Bahru.

As at March 31, Bukit Tinggi, which has a gross lettable area of about one million sq ft, was fully occupied and under a master lease arrangement to AEON that expires on Nov 23, 2029, with an option to renew for three years. Paradigm Mall PJ is 97.9%-occupied, with a net lettable area (NLA) of about 700,000 sq ft, whereas Paradigm JB has an occupancy rate of 99.2%, with an NLA of about 1.3 million sq ft.

The REIT also has the right of first refusal from its sponsor WCT to buy future properties in Malaysia developed or owned by WCT for retail, commercial, industrial or hospitality use. In other words, Paradigm REIT will have priority access to future property deals that will help grow its asset pipeline.

According to Paradigm REIT CEO Selena Chua Kah Noi, there are plans to potentially acquire four more assets — Hyatt Place Johor Bahru Paradigm Mall next year; Le Meridien Hotel in Petaling Jaya (adjacent to Paradigm Mall); Premiere Hotel in Klang; and Gateway@KLIA Terminal 2. These properties are estimated to have a combined value of RM1.8 billion.

REITs are aimed at defensive investors, Paradigm REIT director of investment, finance and accounts Chong Kian Fah at the IPO launch, adding that REITs are often a fixed-income alternative and their returns are typically compared to fixed deposits or other low-risk assets. “We are very confident in the listing, as REITs are considered defensive and dividend-yield play. We are the umbrella for investors seeking safe and secure returns during market turbulence,” he said.

Paradigm REIT’s investment policy includes both direct and indirect investments in income generating properties across sectors such as retail, commercial, office, industrial, hospitality and certain non-property assets.

The IPO comprised a total offering of up to 560 million units, of which 254.7 million were allocated for the retail offering and at least 305.3 million units were offered to institutional investors.

The bumiputera portion of the IPO saw applications for only 4.65 million units out of the 16 million units allocated. The unsubscribed units were then reallocated. The non-bumiputera portion was oversubscribed by 3.7 times.

Of the 194.86 million units available in the restricted offer for sale to stakeholders, only 73.62 million units were taken up. The restricted pink form offerings for eligible persons saw only 8.43 million units subscribed, compared with the 27.79 million units available. The undersubscribed units were then offered to institutional investors. The joint book-runners confirmed that all 426.59 million units, including the reallocated ones, were fully subscribed.

In a client note on May 22, TA Securities estimated the REIT’s fair value at RM1.12 a unit. It said the REIT intends to distribute at least 90% of its distributable income on a half-yearly basis. According to its prospectus, Paradigm REIT is expected to declare a distribution per unit of 7.16 sen for FY2025, based on a full payout of 100% of its distributable income. Distributions will be made twice a year thereafter.

Its peers include Sunway REIT (KL:SUNREIT), KIP REIT (KL:KIPREIT), IGB REIT (KL:IGBREIT), Pavilion REIT as well as CapitaLand Malaysia Trust (KL:CLMT). Maybank Investment Bank is the principal adviser, sole managing underwriter and lead bookrunner for the IPO; CGS International and AmInvestment Bank are the joint underwriters and bookrunners; and RHB Investment Bank Bhd is a joint bookrunner. 

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