Hektar Real Estate Investment Trust (Hektar REIT) has proposed the acquisition of the leasehold interest in a 2.43-hectare site in Setapak, Kuala Lumpur, together with the KYS KL East International School (KYSKLEIS) located on the land, for a total purchase consideration of RM125 million.
In a filing with Bursa Malaysia, MTrustee Bhd, acting on behalf of Hektar REIT, said it had entered into a conditional agreement with KYS College Sdn Bhd (KCSB) for the proposed acquisition and lease arrangement.
The purchase consideration will be settled through a combination of RM106.55 million in cash and the issuance of Hektar REIT units to the vendor.
According to Hektar REIT, KCSB currently holds a 30-year ground lease on the land, effective from March 1, 2016, to Feb 28, 2046, under a Master Lease Agreement (MLA) signed with Sime Darby Property (KL East) Sdn Bhd, the landowner.
The proposed acquisition is subject to several conditions, including the extension of the MLA tenure to 99 years through a supplemental agreement with the lessor, as well as the completion of a secondary school building by KCSB within a stipulated timeframe.
The 2.43-hectare parcel currently houses a pre-school building and a primary school building, and forms part of a larger 3.84-hectare freehold site owned by Sime Darby Property (KL East).
Upon completion of the acquisition, Hektar REIT plans to grant a sub-lease of the land and buildings to KCSB, allowing the continued operation of KYS KL East International School.
Hektar REIT said the proposed sale and leaseback arrangement would be supported by a long-term lease structure of up to 99 years, providing the REIT with fixed and contractually secured rental income from the sub-lessee.
Barring unforeseen circumstances, the proposed acquisition and lease are expected to be completed in the first quarter of 2027.
UOB Kay Hian (M) Sdn Bhd has been appointed as the principal adviser for the proposed transaction.
