KIP Real Estate Investment Trust (KIP-REIT) has increased its assets under management (AUM) to RM2.2bil following the completion of its RM435mil acquisition of Setapak Central Mall, marking a major expansion of its retail property portfolio.
The latest acquisition has also enabled the group to exceed its RM2bil AUM target, which was initially set for 2027, reflecting its continued growth in Malaysia’s retail property sector.
KIP-REIT chief executive officer Valerie Ong.
The mall, which has been officially renamed KIPMall Setapak, becomes the group’s 20th property and strengthens its presence in a strategic urban location within the Klang Valley.
With the addition of the property, KIP-REIT’s total net lettable area has expanded by approximately 16% to 3.8 million sq ft, further increasing the scale of its retail portfolio.
KIP-REIT chief executive officer Valerie Ong said the acquisition is expected to create additional business opportunities across the group’s existing properties, particularly through a larger tenant network.
She highlighted that KIP-REIT currently has more than 1,300 tenants, with the number expected to increase to approximately 1,500 following the inclusion of KIPMall Setapak. This expanded network could provide opportunities for cross-selling and introducing existing retail brands to different locations within the portfolio.
Ong also noted that the group’s gearing level now stands at approximately 41% following the acquisition. Despite the higher gearing, KIP-REIT remains positive about the mall’s growth potential, particularly through improvements to its tenant mix and the introduction of new retail brands.
Among the brands expected to strengthen the mall’s offerings are Jaya Grocer, Oriental Kopi and Panda Eyes, which are intended to enhance its appeal to shoppers and surrounding communities.
KIPMall Setapak is expected to contribute a stable income stream to the group’s portfolio, supported by its existing occupancy and operating performance.
For the financial year ended 2025 (FY2025), the property recorded a net property income (NPI) of RM31.3mil, equivalent to 24.1% of KIP-REIT’s FY2026 NPI. Based on the acquisition price of RM435mil, the property delivers an estimated yield of 7.2%, supporting the group’s strategy of generating consistent returns for its unitholders.
KIP-REIT expects to begin recognising income from KIPMall Setapak from the second quarter of financial year 2027 (2QFY27) onwards. The group also plans to further improve the mall’s tenant mix by attracting established retailers and introducing additional brands.
Ong said the group would continue working towards maintaining its distribution per unit (DPU) for the current financial year, while focusing on the long-term performance of its property portfolio.
She added that KIP-REIT’s community-focused retail model remains resilient, as its malls generally offer affordable products and services that cater to the daily needs of surrounding residents.
Consumer preferences have also increasingly shifted towards neighbourhood shopping centres, particularly since the Covid-19 pandemic, as shoppers seek convenient locations where they can access a range of retail, food and lifestyle offerings under one roof.
According to Ong, most of KIP-REIT’s malls are located within established townships, allowing them to benefit from consistent demand and spending from nearby communities.
The completion of the Setapak Central acquisition therefore represents an important step in KIP-REIT’s expansion strategy, adding scale to its portfolio while strengthening its position in Malaysia’s community retail property market.
