Property News

KIP REIT remains in acquisition mode, says CEO

KUALA LUMPUR (Jan 23): KIP Real Estate Investment Trust (KL:KIPREIT) said it remains in acquisition mode, aiming to expand its portfolio with more retail and industrial properties.

The group wants to hit RM2 billion in assets under management “as soon as possible”, said chief executive officer Valerie Ong Pui Shan (pictured) at a press conference after its general meeting.

“That being said, we must ensure that the properties on our table are accretive for us,” Ong said.

“We are still eyeing for retail and industrial assets; typically, we will look at the secondary or tertiary townships,” she added.

KIP REIT’s total asset value is projected to rise to RM1.49 billion from RM1.39 billion, following the acquisition of four industrial properties associated with its largest shareholder Datuk Eddie Ong Choo Meng.

Valerie also noted that the other possible avenue for the REIT’s growth may come from its private sponsor, KIP Group of Companies.

“KIP Mall Desa Coalfield and KIP Mall Kuantan in the matter of time, our private sponsor will offer the properties to us when they meet our investment criteria,” she said.

Private placement not ruled out

Valerie also did not rule out a potential private placement exercise to fund future acquisitions.

“We are considering all financing options to determine the best option for the unitholders, depending on the interest rate and the cost of private placement. We have to optimize based on the financial situation at that time.”

The latest industrial property acquisition will push KIP REIT’s gearing ratio up to 45.23%. The regulatory limit for REITs is set at 50%.

Valerie also shared the REIT’s strategic efforts to bolster its portfolio through placement exercise, had received strong institutional backing.

On Dec 3, the REITs have successfully placed out 180 million units, or 29.1% of its issued units at that time to partially fund the RM320 million acquisition of D’Pulze Shopping Centre in Cyberjaya, which was completed ahead of schedule.

Institutional investors such as the Employees Provident Fund (EPF), as well as investment funds of Allianz and AIA, have been the major takers of that placement, which has successfully raised RM146.7 million in gross proceeds.

At Thursday’s midday break, shares in KIP REIT closed unchanged at 88, giving the trust a market value of RM702.79 million.

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Source: EdgeProp.my