Johor property to be injected into Hektar REIT

Johor property to be injected into Hektar REIT

KUALA LUMPUR: Hektar Asset Management Sdn Bhd yesterday confirmed plans to inject the proposed “lifestyle shopping centre” in Nusajaya, Johor, into the Hektar Real Estate Investment Trust (REIT) in the future.

The Hektar group plans to build the shopping centre on 50 acres of an 84-acre site in Nusajaya currently owned by Hektar Klasik Sdn Bhd.

Aseambankers Malaysia Bhd director Datuk Mohammed Hussein (left) and Datuk Jaafar Abdul Hamid exchanging documents at the underwriting signing ceremony
The hill top project is expected to have 1 million sq ft of net lettable space.

The injection of the property into the Hektar REIT would be an arm's length transaction, said Hektar Asset Management chairman Datuk Jaafar Abdul Hamid at Hektar REIT's underwriting ceremony yesterday.

However, the injection of the project into the REIT would only take place in a couple of years, because the construction would take “at least two years”, he said.

For its proposed listing on the Bursa Malaysia main board, Hektar REIT already received the injection of two shopping centres - Subang Parade in Selangor and Mahkota Parade in Malacca.

In the immediate term, the REIT intends to develop more retail space in its two existing properties.

“Subang Parade owns two acres - now a nursery - that has potential to be developed into more retail space.

“In Mahkota Parade, the car park is about three acres that has potential to be developed into more retail space. So all in, we have five acres (to develop),” Jaafar said.

Hektar Asset Management is the manager of Hektar REIT, whose initial public offer (IPO) is underwritten by Aseambankers Malaysia Bhd and AmMerchant Bank Bhd.

The IPO is expected to raise proceeds of RM176mil, of which about RM7mil will be for listing expenses and RM1mil for working capital.

The remainder will partly finance the acquisition of Subang Parade and Mahkota Parade as well as the repayment of loans.

The proposed listing exercise involves an offering of 159.5 million new units in Hektar REIT. The Hektar group intends to retain a 51.16% stake in Hektar REIT upon completion of the exercise.