KIP Real Estate Investment Trust (KL), a firm specializing in retail property management, announced plans on Monday to acquire the seven-floor DPulze Shopping Center for RM320 million.
The acquisition, set to increase KIP REIT’s total assets by nearly 34% to RM1.29 billion, will be financed through a mix of bank borrowings and proceeds from a planned private placement, according to an exchange filing.
The private placement involves selling up to 180 million new units through bookbuilding. KIP REIT Managing Director Ong Kook Liong has committed to purchasing up to 15 million of these units.
As of the end of March 2024, KIP REIT reported cash holdings of RM27.52 million and borrowings amounting to RM388.70 million.
This acquisition represents KIP REIT’s largest since its listing on Bursa Malaysia’s Main Market in 2017 and is expected to be completed by the first quarter of 2025.
“We were presented with this opportunity as one that enhances the strength of our retail asset portfolio, aligning with our strategy to focus on community-centric neighborhood shopping malls,” said KIP REIT Executive Director and CEO Valerie Ong Pui Shan. She made this statement after signing the sale and purchase agreement with DPulze Ventures Sdn Bhd, whose shareholder-directors are Kan Ah Chun and Ng Choo Hai.
Located in Cyberjaya’s major commercial area and near the newly opened Mass Rapid Transit Putrajaya line, DPulze Shopping Centre is fully occupied and generates RM22 million in revenue as of April 2024. Its anchor tenants include Jaya Grocer and TGV Cinema, along with other notable retailers such as Celebrity Fitness, Starbucks, Sushi King, Guardian, The Body Shop, MPH Bookstores, Yamaha Music School, and Skechers.
Future Asset Acquisitions
Beyond retail properties, KIP REIT is exploring potential industrial assets to achieve RM2 billion in assets under management (AUM) within the next three years. While details on these potential acquisitions remain under negotiation, Valerie Ong indicated a focus primarily on Peninsular Malaysia, with possibilities open for East Malaysia as well.
In February, KIP REIT completed an RM80 million acquisition of KIPMall Kota Warisan in Sepang. As of March 2024, KIP REIT’s AUM stood at RM1.06 billion, comprising 11 properties: three industrial properties in Pulau Indah, seven KIP Malls in Bangi, Tampoi, Kota Tinggi, Masai, Senawang, Melaka, and Kota Warisan, and the AEON Mall Kinta City in Ipoh.
At the time of reporting, KIP REIT’s units were trading half a sen or 0.56% higher at 89.5 sen, valuing the group at RM550.58 million.
