KUALA LUMPUR (April 27): KIP Real Estate Investment Trust (KL:KIPREIT) announced plans to buy Setapak Central Mall, Kuala Lumpur from Festiva Mall Sdn Bhd — which is indirectly owned by Singapore-listed Frasers Property Ltd — for RM435 million to expand its retail portfolio.
KIP REIT said the RM435 million purchase sum will be funded via a mix of borrowings and a private placement exercise of up to 220 million new units, representing about 22.95% of KIP REIT’s existing issued units.
Based on current estimates, borrowings will account for RM258.2 million or 59.4% of the purchase price, with the remaining RM176.8 million to come from the placement exercise, which is expected to raise about RM184.8 million based on the indicative issue price of 84 sen per placement unit.
The three-storey Setapak Central Mall has a net lettable area of 514,777 sq ft and an occupancy rate of 99.89% as at Feb 28, 2026.
KIP REIT chief executive officer Valerie Ong said the acquisition marks another step in KIP REIT’s growth, as the mall will become KIP REIT’s 19th asset and largest by value upon completion, lifting assets under management (AUM) from RM1.70 billion to RM2.10 billion, ahead of its 2027 target of RM2 billion.
"With our AUM and market capitalisation milestones achieved, we remain focused on quality growth by driving rental reversions, sharpening leasing strategies, and executing asset enhancement initiatives to deliver sustainable DPU (distribution per unit) growth while keeping our assets relevant to evolving consumer needs," she said in a statement.
Meanwhile, KIP REIT posted a 17.6% rise in net property income (NPI) for its third quarter ended March 31, 2026 (3QFY2026), driven by stronger contributions from its existing assets and recent acquisitions.
NPI for the quarter rose to RM32.32 million from RM27.48 million a year earlier, while gross revenue increased 12.9% to RM44.65 million from RM39.54 million, according to its Bursa Malaysia filing on Monday.
Net profit attributable to unitholders rose 31.4% to RM18.17 million from RM13.82 million, while earnings per unit improved to 1.89 sen from 1.73 sen.
The REIT declared a third interim income distribution of 1.73 sen per unit, bringing year-to-date distribution to 5.23 sen per unit versus 4.78 sen per unit a year earlier.
KIP REIT’s portfolio comprises retail, industrial and commercial properties, with suburban community malls remaining its core earnings driver.
The retail segment contributed RM41.4 million or 92.7% of quarterly gross revenue, while the industrial segment recorded 86% growth from a year earlier off a smaller base.
For the nine-month period (9MFY2026), KIP REIT's NPI climbed 37.3% to RM94.45 million from RM68.77 million, as revenue rose 33.9% to RM128.88 million from RM96.24 million.
Nine-month earnings per unit increased to 5.74 sen from 5.14 sen previously.
KIP REIT units closed at 85.5 sen on Monday, down half a sen, valuing the trust at about RM819.6 million.