KUALA LUMPUR: Hektar Real Estate Investment Trust is taking over Kolej Yayasan Saad Melaka's (KYSM) campus from KYS College Sdn Bhd (KCSB) for RM150 million.
In a filing with Bursa Malaysia Secruities today, Hektar REIT said it has entered into a conditional sale and purchase agreement with KCSB for the proposed acquisition of a single, 1 ½, two and three-storey buildings which make up the administration, academic, residential and student facilities of KYSM.
It will fund the bulk of the purchase price through a combination of cash and issuance of 99,757,594 new units via a private placement, which will raise up to RM56.56 million for the company.
If need be, the company may even issue new units to KCSB to fund the deal.
Hektar REIT plans to take over a 30-year lease KYSM's operator, KYSA Education Sdn Bhd, signed with KCSB on June 22, 2023, once the deal is completed.
Under the arrangement, Hektar REIT will earn rent of RM8.1 million for the first year of the term, followed by a 2.5 per cent yearly rental increase.
Hektar REIT said the asset is a quality addition to Hektar REIT's portfolio and improve the diversity of its overall property mix with lesser reliance on the retail sector.
Besides that, it will enlarge the net lettable area of Hektar REIT by 396,874 sq ft or 20 per cent from the existing size of 2 million sq ft.
The total asset value of Hektar REIT will also increase by RM150 million or 12 per cent from RM1.206 billion as at December 31, 2022.
Established in 1995, KYM is a fully residential and co-educational private school which offers secondary school education under Malaysia's New National School Curriculum for students from Form 1 to Form 5.