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PETALING JAYA: KIP REIT Management Sdn Bhd today announced that Pacific Trustees Bhd, acting as trustee to KIP Real Estate Investment Trust (KIP REIT), has entered into conditional sale and purchase agreements (SPA) with Hextar Chemicals Sdn Bhd, Hextar Industrial Chemicals Sdn Bhd and Teju Logistics Sdn Bhd, respectively, for the sale and purchase of three industrial properties located in Pulau Indah for RM78.7 million, marking KIP REIT’s maiden acquisition of industrial assets.
Based on the date of valuation on June 20, 2022 by Henry Butcher Malaysia (Sel) Sdn Bhd, the aggregate market value of the properties is RM78.9 million.
With the proposed acquisitions of the industrial assets in Pulau Indah Industrial Park, Port Klang, Selangor, 350,000 sq ft of lettable area will be added to KIP REIT’s portfolio. The properties will be leased to related companies of the Hextar group on a triple net basis for a fixed period of 15 years from the date of completion of the SPA at a total initial annual rental of about RM5.1 million with built-in agreed rental escalations of 13% scheduled on Year 4, Year 7 and Year 11.
The proposed acquisitions and the proposed leases are deemed related party transactions and are subject to the approval of the unitholders of KIP REIT at a general meeting to be convened, shareholders of Hextar Global Bhd in respect of proposed acquisition and the proposed lease of Klang Property 1 at a general meeting to be convened, consents from the state authority of Selangor and any other relevant authorities and/or parties if required.
Submissions to the relevant authorities for the proposed acquisitions will be made within two months, with the exercise expected to be completed in the second quarter of 2023. The proposed leases will commence upon the completion of the proposed acquisitions.
KIP REIT Management Sdn Bhd executive director Datuk Ong Kook Liong said the proposed deals will be its maiden acquisitions of industrial assets in line with its amended investment policy as at Sept 29, 2020.
“While we will continue to manage all our retail-focused assets, we will also continue to explore growth opportunities in the industrial and warehousing sub- sectors to grow our income base investment portfolio of industrial assets.”
