KUALA LUMPUR (Feb 13): KIP Real Estate Investment Trust (KL:KIPREIT) will fund a RM160 million expansion of AEON Mall Kinta City in Perak to secure a 25-year lease from AEON Co (M) Bhd (KL:AEON). The project is expected to be completed by the fourth quarter of 2027.

In a filing with the bourse on Friday, KIP REIT said AEON, which currently holds a five-year lease for the three-storey shopping mall running until Sept 28, 2030, will extend its lease by 25 years to 2055, covering both the existing and expanded areas, as part of the deal.

The mall’s leasable space will grow 27% to 675,000 sq ft and net lettable area by 30% to 580,000 sq ft, with upgraded facilities and tenant mix to boost shopper appeal and efficiency. 

Upon completion, the expansion is expected to deliver an estimated yield of about 8% to KIP REIT, translating into an annual gross rental income of about RM12.8 million under AEON’s long-term lease arrangement. 

KIP REIT said the expansion is a strategic move to strengthen the mall, increase retail space, improve its market position, and secure long-term income with strong rental growth.

KIP REIT’s units were unchanged at midday break at 93 sen, valuing the company at RM891.5 million.