KIP-REIT upbeat on growth prospects in 2025

PETALING JAYA: KIP Real Estate Investment Trust (KIP-REIT) remains optimistic about its performance in 2025, driven by its aggressive approach to asset acquisitions on top of the promising outlook for the market.

KIP-REIT chief executive officer Valerie Ong Pui Shan said the group had performed fairly well against its peers last year.

“Players within the market are on the upward trend and we are cautiously optimistic for this year as well.

“Also, with a stable tenancy rate and strong company fundamentals with less exposure to currency risks, I think KIP-REIT stands in a pretty good position for 2025,” she told StarBiz.

She added that as the majority of KIP-REIT’s assets are within the retail sector, the influx of visitors to Malaysia will not only help the country’s economy, but also bring in higher footfall for the group’s retail assets as well.

She highlighted that this is especially beneficial for the southern region, as she stated that “there is a lot of inflow of not just Singaporeans, but also other foreigners visiting as well”.

As for the industrial segment, she attributed the positive outlook to the foreign interest which is looking to set up a regional base in Malaysia.

When asked about which sector takes up most of the group’s assets, Ong said the majority are within the warehousing sector, which she said is more resilient and stable in terms of tenancy.

While data centres are an upcoming sector, she stated that KIP-REIT still remained cautious and may only consider looking into it in the mid-term.

“At this juncture, if we are going to acquire from an external party, we have to ensure that all these resources are in place.

“That is why I say sustainability is also one key factor to our consideration. Otherwise, if they don’t have the resources, they cannot generate income.

“They cannot pay us for this kind of yield. So, we are very cautious about that,” she explained.

In terms of key factors for asset acquisition, Ong highlighted that occupancy, tenancy, property conditions and yields are the primary considerations.

She stated that rental yields typically ranged between 6.5% and 7.5%, adding that achieving 6.5% was already challenging in the current market.

“Nevertheless, because of our current yield which is quite high at the moment, we want to make sure that our unitholders get the most out of our acquisition,” she added.

Moving forward, KIP-REIT continues to be open to new opportunities and will continue to aggressively acquire sustainable assets. This is in line with the group’s ambition of achieving RM2bil in assets under management (AUM) within the next three years.

KIP-REIT has to-date accumulated RM1.5bil in AUM following the approved acquisition of four industrial properties worth RM98.3mil in Cheras Jaya, Selangor, Bintulu, Sarawak, Klang, Selangor and Pasir Gudang, Johor.

These are on top of the two completed acquisitions of DPulze Shopping Centre in Cyberjaya, as well as the TF Value Hypermarket in Hulu Perak.

“In total, we acquired about RM400mil worth of assets last year. So that has sort of propelled us to the next level,” she said.

In terms of dividends, Ong said, “I think generally in terms of dividends, since the inception of our REIT in 2017 until now, we have always paid above 90% of our dividends.

“And with DPulze and TF Value Mart on board, of course we will be doing well. Especially when it’s all materialised and accounted for, I think we should be expecting more,” she added.

The counter has two “buy” calls by analysts with an average target price of RM1.09 apiece. In its latest financial report, KIP-REIT saw a slight increase in net profit by nearly 5% year-on-year to RM22.06mil in the second half of financial year 2025 ended Dec 31, 2024.