Frasers-backed Hektar REIT looks to double asset value to $580m by 2026

Kuala Lumpur, Malaysia. Photo: Pixabay

Malaysia-based pure retail real estate investment trust Hektar REIT is looking to double its asset value from the current RM1.2 billion ($290 million) to RM2.4 billion ($580 million) by 2026 through the inorganic route, said its top executive.

“The goal is still on track and we’re currently in an active negotiation for an acquisition, which will most likely to be out of Klang Valley. We will announce in due time,” said Hektar Asset Management executive director and CEO Hisham Othman at the press conference on Tuesday.

Hektar REIT recorded RM135.1 million ($32.8 million) in revenue in the 2018 financial year, up 7.6 per cent from 2017, while its net property income rose 6.8 per cent to RM78.7 million ($19.12 million) in the same period.

Overall, the market valuation of its portfolio has increased by RM26.9 million ($6.5 million) in 2018 buoyed by its post-refurbishment asset enhancement initiatives in northern Malaysia and positive rental reversion growth for its assets in southern Malaysia.

Last year, Hektar REIT acquired a mall in Johor, the southern state of Malaysia, for RM104 million ($25.3 million), which took the number of assets under its portfolio to six shopping centres valued at RM1.2 billion.

“Essentially, four of our malls which have been refurbished have recorded strong rental growth. The other two of our malls are being planned for refurbishment or asset enhancement. Five of our malls are outside of Klang Valley. Overall, the portfolio is recording growth and that is the benefit of having a well-diversified portfolio within Hektar REIT,” added Hisham.

Singapore-based Frasers Property is a cornerstone investor of Hektar REIT. It holds a 31.15 per cent stake in the REIT via its SGX-listed retail REIT Frasers Centrepoint Trust.

Also read:

Singapore may see rise in REIT mergers as sector is ripe for consolidation

Singapore’s Fraser raising stake in PGIM Real Estate Asia Retail Fund

Where are Asian investors making their real estate bets?