KIP Real Estate Investment Trust (KIP REIT), through its trustee Pacific Trustees Bhd, has entered into a conditional sale and purchase agreement to acquire Setapak Central for RM435 million.
In a filing with Bursa Malaysia today, the group stated that the purchase involves a three-storey leasehold shopping mall with underground parking strategically located in Setapak, Kuala Lumpur.
A combination of bank loans and a private equity offering will fund the purchase, with a financing ratio of approximately 60:40, according to the group.
KIP REIT said that Setapak Central has a high occupancy rate of 99.9% as of February 28, 2026, with a net lettable area (NLA) of 47,824.35 square metres.
This NLA is expected to expand the group’s current portfolio by 306,580.032 square metres, an estimated increase of approximately 15.6 per cent.
Net property income for the financial year ended 2025 of RM31.3 million was recorded, translating into an attractive yield of 7.2%, thus strengthening the ability to provide stable and sustainable income to KIP REIT.
19th, Largest Asset of KIP REIT
Setapak Central will become the group's 19th asset and its largest asset in terms of value upon completion of the acquisition, KIP REIT said in a statement.
The group stated that the proposed acquisition is expected to enhance the quality and scale of KIP REIT's portfolio and increase assets under management from RM1.7 billion to RM2.1 billion.
With this, the company can achieve the RM2 billion target set for 2027 ahead of schedule.
The increased number of issued units will strengthen the group's market capitalization to approximately RM1 billion, which has the potential to raise the corporate profile as well as improve access to the capital market and support more competitive financing costs in the long term.
The purchase is also expected to increase distribution per unit (DPU) in the long term, in line with KIP REIT's strategy to provide sustainable returns to unit holders, according to KIP REIT.
Its chief executive officer, Valerie Ong, said the proposed purchase of Setapak Central marked another important step in KIP REIT's growth journey.
