Hektar REIT to acquire malls for RM181m

Hektar Asset Management Sdn Bhd, the Manager of Hektar Real Estate Investment Trust (Hektar REIT), is set to acquire two prime shopping malls in Kedah for RM181 million.

The malls, the Landmark Central in Kulim and Central Square in Sungai Petani, are to be acquired for a purchase consideration of RM98 million and RM83 million, respectively.

"The two malls in Kedah would further enhance the long-term value of Hektar REIT’s property portfolio. With that, we can now spread our portfolio to the entire west coast of Peninsula Malaysia, augmenting our presence in Selangor, Melaka and Johor.

"Additionally, the acquisition is in line with the REIT's investment strategy to create and enhance the value of its acquired assets," Chairman and Chief Executive Officer of Hektar Asset Management, Datuk Jaafar Abdul Hamid said in a statement, today.

The acquisition of both malls signifies Hektar REIT's expansion to the northern region.

It is in accordance with its investment strategy of targeting prime neighbourhood malls, as they are more resilient during times of an economic downturn, capitalising on the economic growth and vibrancy of the retail market.

"Approximately RM19 million has been allocated as the initial cost of exterior and interior refurbishments of both malls, which will be financed via internal funds and bank borrowings.

"The refurbishments will endeavour to improve the value of both assets by drawing a good tenancy mix, facilitating improvements in rental rates and eventually attracting a commendable consumer traffic," Jaafar said.

Currently, Hektar REIT's portfolio comprises Subang Parade, Mahkota Parade (Melaka) and Wetex Parade (Johor).

The acquisition will also increase the REIT's gross asset value to RM1.04 billion.

The enlarged net lettable area (NLA) of Hektar REIT is expected to increase by 54 per cent, from 1.1 million square feet to 1.7 million square feet, after the proposed acquisition of both malls.

By Bernama