Hektar REIT completes acquisition of KYSM, aims to double portfolio size by 2027

KUALA LUMPUR: Hektar Asset Management Sdn Bhd, manager of Hektar Real Estate Investment Trust (Hektar REIT), announced the completion of the acquisition of Kolej Yayasan Saad Melaka (KYSM) for RM148.5 million. This is a milestone in Hektar REIT’s strategic expansion and diversification drive as it is the first education asset in its portfolio.

The acquisition of KYSM offers Hektar REIT a number of benefits as the assets are secured by a 30-year quadruple net lease, which guarantees annual revenue growth and an average rate of return of 8.0 percent over the life of the lease.

“The acquisition will increase Hektar REIT’s assets under management by 12 per cent to RMB 1.38 billion and with demand consistently exceeding the annual demand for university places, Hektar REIT sees further asset growth potential that can be unlocked,” the company said in a statement today.

According to the manager, the KYSM acquisition is the first acquisition of non-retail assets by Hektar REIT.

“Hektar REIT is in an active acquisition phase as we seek to inject more income-generating assets and plan to double the size of our portfolio to RM3.0 billion by 2027.

“Several assets are already in the pipeline for our consideration, and the strategy is to aggregate non-retail assets to 20 percent of our portfolio,” the release reads.

Hektar REIT is executing on its growth strategy and is currently in active discussions with several parties regarding a further acquisition.

When selecting new assets, the manager said the REIT is focusing on income-generating assets that can provide sustainable and defensive cyclical income, with a particular focus on education and industrial assets.

Given the resilience of these sectors to market changes, Hektar REIT can invest in them.

For example, the private sector education market is estimated to grow at an average annual rate of 6.5–7.0 per cent, with market research indicating further capital growth.

KYSM has consistently ranked among the top ten schools in the country in terms of Sijil Pelajaran Malaysia exam results and has been renowned for its excellence in both academics and extra-curricular activities since its establishment in 1995. – Bernama