This article first appeared in The Edge Malaysia Weekly on June 1, 2026 - June 7, 2026

TWO weeks ago, Hektar Real Estate Investment Trust (KL:HEKTAR) (Hektar REIT) proposed the acquisition of an international school from the Kolej Yayasan Saad group. The targeted acquisition is KYS KL East International School (KYSKLEIS) while the vendor is KYS College Sdn Bhd (KCSB).

If approved by shareholders, the acquisition will mark the third deal involving the educational group founded by Tan Sri Halim Saad and Hektar REIT in just three years. In 2024, Hektar REIT acquired Kolej Yayasan Saad from KCSB and this year, it completed another transaction involving land adjacent to the college.

In response to growing concerns about the string of acquisitions and Hektar REIT’s increasing exposure to education-related assets, the management provided the following justification for the proposed deal.

The Edge: Hektar REIT recently announced the proposed acquisition of KYSKLEIS for RM125 million — the third deal in three years involving Hektar REIT and the KYS group. What is the rationale for acquiring an asset that is still in its infancy of development?

Hektar REIT: Hektar REIT’s investment in KYSKLEIS reflects a disciplined, long-term approach to portfolio diversification grounded in the structural resilience of the private education sector, the quality of the operator and the strategic strength of the location.

KYS is an established and growing operator in the K-12 private and international school segment. The school follows the globally recognised Cambridge International Curriculum, offering a structured pathway from Early Years through IGCSE, building a credible track record of academic quality and increasing enrolment demand. Strategically, the asset is situated within and anchors the KL East township by Sime Darby Property Bhd (KL:SIMEPROP). The surrounding catchment comprises high disposable income households and expanding residential communities, underpinning sustained, long-term demand for quality international education. KYSKLEIS serves as an important educational anchor within this ‘live-learn-shop’ ecosystem.

Financially, the transaction is structured as a sale-and-leaseback on a triple net basis with KCSB continuing to manage the school under a long-term sub-lease. The lease incorporates a 10% rental escalation every three years, providing Hektar REIT with contractually secured, inflation-linked income growth. The acquisition is expected to generate an initial net rental yield of 6.7% upon completion of the new building, and an average net yield of about 8.87% over the initial 30-year lease term.

While the school continues to scale up operationally, the income structure provides near-term income visibility. Upon full completion, the acquisition will enlarge Hektar REIT’s net lettable area by 9.4% and increase total asset value by 8.6% from RM1.46 billion as at end-2025. Taken together, this acquisition is consistent with Hektar REIT’s strategy to grow a diversified, income-generating portfolio anchored by defensive, long-duration assets — evaluated on commercial merits in the best interests of unitholders.

Hektar REIT is managed by Hektar Asset Management Sdn Bhd, whose major shareholder is Hektar Klasik Sdn Bhd. Is the board of Hektar REIT aware that Hektar Klasik is the subject of a legal dispute involving Halim, who has claimed ownership of the company?

Hektar REIT remains fully focused on fulfilling its responsibilities to unitholders as the manager of the REIT, including maintaining prudent investment discipline, strong operational performance and rigorous regulatory compliance As a listed REIT, Hektar REIT operates within a robust governance framework, with oversight provided by the Board, the Trustees, and the relevant regulatory authorities — all functioning independently of shareholder-level matters pertaining to its management company.

Critically, any corporate exercise or acquisition undertaken by Hektar REIT is evaluated solely on its commercial merits, strategic rationale, and alignment with the interests of unitholders, independent of matters relating to shareholders outside the REIT structure. Hektar REIT continues to adhere to all applicable governance and disclosure requirements under the relevant regulatory framework. Accordingly, we are unable to comment further on matters outside the scope of Hektar REIT’s operations and disclosures.

Is KCSB linked to Halim?

The transaction is subject to all applicable governance processes, regulatory requirements, oversight frameworks governing Hektar REIT and ultimately unitholders’ approval, ensuring that the interests of all unitholders are appropriately safeguarded. The acquisition of KYSKLEIS is deemed a related-party transaction, as disclosed in Section 8 of Hektar REIT’s Bursa Malaysia announcement. The proposed acquisition was evaluated on the commercial merits of the transaction, including the addition of a resilient asset class to the REIT’s portfolio, the long-term lease structure, contractually secured income visibility, the asset’s strategic location in the KL East township and the operational fundamentals of KYS as an established educational operator.

Read also:
Shareholder dissent brewing at Hektar REIT

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