Hektar REIT to acquire 41.8 acres in Melaka for RM40mil, signs 30-year leaseback deal
In a filing with Bursa Malaysia, Hektar REIT said its trustee, MTrustee Bhd, entered into two conditional sale and purchase agreements with KYS College Sdn Bhd for the proposed acquisition.
The land comprises a 6.3-acre parcel priced at RM6mil and a 35.5-acre portion of land priced at RM34mil, both located in Mukim Durian Tunggal, Alor Gajah.
The properties will also be leased back to the vendor as part of the agreement.
As part of the deal, the land will be leased back to KYS College.
MTrustee has also signed two lease agreements with KYSA Education Sdn Bhd, the current operator of Kolej Yayasan Saad Melaka, for a 30-year triple net lease on the properties.
The lease includes a 10% rental escalation every three years, with a combined average yield of 8.45% over the 30-year term.
It added that the lessee also has the option to extend the lease for another 30 years, and subsequently until the end of the leasehold period.
Hektar REIT said the proposed acquisition will be funded through a combination of cash and borrowings, with RM24mil in financing expected to be raised.
It said the proposed acquisition and lease align with its long-term goal of providing sustainable income to unitholders by investing in quality real estate with stable returns.
Although the acquisition currently involves only the land, it lays the groundwork for future expansion of KYS. Once the lessee completes development on the site, Hektar REIT may choose to acquire the completed building, shifting the rental structure to one based on gross floor area.
It said this would boost future income potential and further diversify the REIT's portfolio with greater exposure to the growing education sector.
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