KIP REIT will acquire DPulze Shopping Center for RM320 million

KUALA LUMPUR (May 27): KIP Real Estate Investment Trust (KL:KIPREIT), which mainly manages retail properties, said on Monday it plans to acquire the seven-story DPulze shopping mall for RM320 million.

The acquisition, which will increase the company’s total assets by almost 34% to RM1.29 billion, will be funded by bank loans and proceeds from the planned private placement, KIP REIT said in a stock exchange filing.

The placing includes the sale of up to 180 million new apartments through bookbuilding. He noted that KIP REIT managing director Ong Kook Liong has committed to take up as many as 15 million condominium units.

Based on the sample price of RM0.815, the private placement could raise up to RM146.7 million. As of end-March 2024, KIP REIT’s cash position was RM27.52 million and debt was RM388.70 million, according to its latest financial statement.

The acquisition, which is the REIT’s largest acquisition since its listing on the Main Market of Bursa Malaysia in 2017, is expected to be completed by the first quarter of 2025.

“We have received this opportunity as an opportunity that will add strength to our retail portfolio, in line with our strategy of being part of Malaysia’s leading real estate market that focuses on community-focused, local shopping malls,” said KIP REIT director and CEO Valerie Ong Pui Shan .

She told this to the press after signing the sale and purchase agreement with the seller, DPulze Ventures Sdn Bhd. The shareholder-directors of DPulze Ventures are Kan Ah Chun and Ng Choo Hai.

Located in the heart of Cyberjaya’s prime shopping district, close to the newly opened Mass Rapid Transit Putrajaya line, DPulze Shopping Mall, which is fully occupied, is generating revenues of RM22 million as of April 2024.

Its main tenants are Jaya Grocer and TGV Cinema. Other notable retailers include Celebrity Fitness, Starbucks, Sushi King, Guardian, The Body Shop, MPH Bookstores, Yamaha Music School and Skechers.

In addition to retail properties, KIP REIT is also exploring potential industrial assets to target RM2 billion in assets under management (AUM) in the next three years.

As negotiations are still ongoing, the REIT did not provide details of potential acquisitions.

“We are keeping our options open. We are mainly looking at Peninsular Malaysia at the moment. But we are keeping options open for East Malaysia as well,” Valerie said.

Just three months ago in February, KIP REIT completed the acquisition of KIPMall Kota Warisan in Sepang for RM80 million.

As of end-March 2024, KIP REIT had a net asset value of RM1.06 billion and comprised 11 properties – three industrial properties in Pulau Indah; seven KIPMalls in Bangui, Tampoi, Kota Tinggi, Masai, Senawang, Melaka and Kota Warisan; and AEON Mall Kinta City in Ipoh.

At the time of writing, KIP REIT units were trading half a sen or 0.56% higher at 89.5 sen, valuing the group at RM550.58 million.