KUALA LUMPUR: Hektar Real Estate Investment Trust (Hektar REIT) plans to acquire more assets outside the Klang Valley as second-tier malls and real estate investment trusts (REITs) are facing a tough time keeping tenants and raising rentals due to fierce competition.
The company aims to stand out from other second-tier retail REITs by maintaining its occupancy rate.
Hektar Asset Management Sdn Bhd chief executive officer Datuk Hisham Othman said Hektar REIT was eyeing more assets outside the Klang Valley and find a niche of unserved demand, typically in developing towns.
“Our strategy is to strengthen the long-term value of our portfolio as well as reinforce the REIT’s position as a sizeable and geographically well-diversified retail REIT in Malaysia.
“Our portfolio currently focuses on niche retail assets located across key growth areas. These neighbourhood malls in developing towns have proven to be resilient in nature.
“With our malls strategically located in high traffic concentration and accessibility, we are confident of maintaining about a 96 per cent occupancy rate this year,” he told NST Business yesterday.
Hektar REIT has one asset in the Klang Valley, namely Subang Parade Mall, and Hisham did not rule out the possibility of selling if the price was right.
Its other malls are Mahkota Parade (Melaka) and Wetex Parade in Muar (Johor), as well as Central Square in Sungai Petani and Landmark Central in Kulim, Kedah.
Hektar REIT is also adding 1Segamat Shopping Centre and this will boost its portfolio to RM1.2 billion from RM1.09 billion previously.
The acquisition of the property is expected to be completed in the third quarter of this year.
The National Property Information Centre reportedly said the average occupancy rate for shopping malls in Kuala Lumpur had declined to 86.9 per cent last year, which was the third consecutive year of declines.
This was partially due to fierce competition among malls located close to each other and tight consumer spending.