9 Things To Know About KIP REIT

KIP REIT was listed on Bursa Malaysia on 6 February 2017 with a portfolio of 6 properties valued at RM 580.0 million. These properties consist mainly retail centres that are located in neighbourhoods with their residents within the lower-to-middle income bracket. In this article, I’ll list down 9 key things that you need to know about KIP REIT before you invest.  

#1: Stock Symbol

Ticker Symbol: KLSE: KIP REIT / KLSE: 5280
Market Capitalization: RM 434.6 Million (4 January 2018)

Share Price: RM 0.86 (4 January 2018)

Industry: Reit

Syariah Compliant: Nope

#2: The Business

KIP REIT derives income from the following properties:

  1. KIP Mart Tampoi

    KIP Mart Tampoi is a single-storey retail centre measuring 163,411 sq. ft. of net lettable area (NLA) located within a residential area known as Taman Tampoi Indah, Johor Bahru. In 2017, it is valued at RM 150 million, accounting for 25.9% of the value of its portfolio. This centre enjoys a 97.8% occupancy rate with a pool of 266 tenants. In Q1 2018, KIP Mart Tampoi has made RM 3.95 million and RM 2.78 million in gross revenue and net property income respectively.

  2. KIP Mart Kota Tinggi

    KIP Mart Kota Tinggi is a single-storey retail centre with the net lettable area (NLA) of 72,031 sq. ft. located at Kota Tinggi, Johor. In 2017, the property is valued at RM 55 million, accounting for 9.5% of the value of its portfolio. KIP Mart Kota Tinggi enjoys a 94.4% occupancy rate with a pool of 152 tenants. In Q1 2018, the retail centre has made RM 1.50 million and RM 0.89 million in gross revenue and net property income respectively.

  3. KIP Mart Masai

    KIP Mart Masai is a single-storey retail centre measuring 143,064 sq. ft. of the net lettable area (NLA) located within a residential area known as Taman Bukit Dahlia in Pasir Gudang, Johor. In 2017, the property is valued at RM 157 million, accounting for 27.1% of the value of its portfolio. It enjoys a 95.7% occupancy rate with a pool of 262 tenants. In Q1 2018, KIP Mart Masai has made RM 4.14 million and RM 3.03 million in gross revenue and net property income respectively.

  4. KIP Mart Lavender Senawang

    KIP Mart Lavender Senawang is a single-storey retail centre with the net lettable area (NLA) of 114,473 sq. ft. located in Lavender Heights township area in Seremban. In 2017, the property is valued at RM 38 million, accounting for 6.6% of the value of its portfolio. It enjoys an 80.3% occupancy rate with a pool of 74 tenants. In Q1 2018, the mart has made RM 0.79 million and RM 0.28 million in gross revenue and net property income respectively.

  5. KIP Mart Melaka

    KIP Mart Melaka is a two-storey retail centre measuring 182,373 sq. ft. of the net lettable area (NLA) located at the Batu Berendam industrial area in Melaka. In 2017, it is valued at RM 50 million, accounting for 8.6% of the value of its portfolio. The mart enjoys a 67.3% occupancy rate with a pool of 65 tenants. In Q1 2018, this property has brought in RM 1.28 million and RM 0.28 million in gross revenue and net property income respectively.

  6. KIP Mall Bangi

    KIP Mall Bangi is a five-storey shopping centre with the net lettable area (NLA) of 260,429 sq. ft. located in Bangi, Selangor. In 2017, KIP Mall Bangi is valued at RM 130 million, accounting for 22.4% of the value of its portfolio. The shopping centre enjoys an 82.32% occupancy rate with a pool of 156 tenants. In Q1 2018, this property has contributed RM 3.65 million and RM 2.36 million in gross revenue and net property income respectively.

#3: The Financials

In Q1 2018, KIP REIT has reported RM 15.30 million and RM 7.61 million in gross revenue and realized earnings. It has declared and paid out 1.50 sen in distribution per unit (DPU) for the quarter.

#4: Major Acquisitions

As at 30 September 2017, there is no announcement or proposal of any major acquisition or disposal of investment properties made by KIP REIT.  
Presently, KIP REIT holds Right of First Refusal (ROFR) for the acquisition of 5 properties from its promoter. These properties include KIP Mall Kota Warisan, KIP Mart Sendayan, KIP Mart Sungai Buloh, KIP Mart Kuantan, and KIP Mart Sungai Petani.

The construction of KIP Mall Kota Warisan has been completed and was soft launched on 29 August 2017. The remaining properties are at different stages of completion and would be launched progressively up till the year 2019.

#5: Lease Profile

The following are the proportion of leases of KIP REIT’s properties which will expire starting in the financial year 2017 onwards:

Source: Annual Report 2017 of KIP REIT

#6: Valuation

As I write, KIP REIT is trading at RM 0.86 a unit.

As at 30 September 2017, KIP REIT has reported having RM 0.99 in net asset value a unit. Thus, its current P/NAV works out to be 0.87.

KIP REIT adopts a distribution policy to declare and pays out at least 90% of its distributable income on a quarterly basis. In Q1 2018, KIP REIT has paid out 1.50 sen in DPU.

If KIP REIT is able to maintain its DPU at 1.50 sen for the next 4 quarterly distributions, it would pay out 6.00 sen in DPU. As such, its gross dividend yield is expected to be 6.98%. For individual investors, it is prudent to deduct 10% withholding tax from 6.00 sen when calculating your net dividend yield, as such, I would expect net dividend yield to be 6.28%.

#7: Debt Profile

As at 30 September 2017, KIP REIT has recorded RM 86.8 million in total borrowings. It works out to be 14.2% of KIP REIT’s total asset value of RM 612.0 million, thus, is in line with its intention to maintain below 50% in debt-to-total assets.

#8: Investor Relations

For further enquiries or to request for additional investment information on KIP REIT’s Investors Relation matters, you may contact:

Ms. Yee Sieow Teng
Telephone: +603 6259 1133

Email: ir@kipreit.com.my

Website: http://www.kipreit.com.my/contact.html

#9: Major Shareholders

As at 31 July 2017, the substantial shareholders and their direct shareholdings of KIP REIT are as followed:

– Landasan Primamaju Sdn Bhd: 13.62%

– Dato’ Chew Lak Seong: 5.80% (indirect shareholdings: 38.42%)

– Dato’ Ong Kook Liong: 5.80% (indirect shareholdings: 38.42%)

– Adamin Corporation Sdn Bhd: 5.09% (indirect shareholdings: 13.09%)

– Great Eastern Holdings Ltd: 0.00% (indirect shareholdings: 6.73%)

Note:

Dato’ Chew Lak Seong and Dato’ Ong Kook Liong are both the promoters and major shareholders of KIP REIT. They are co-founders of KIP group of companies. Dato’ Chew Lak Seong and Dato’ Ong Kook Liong are appointed as Managing Director and Executive Director of KIP REIT respectively.

If you are just getting started in learning about investing in the Asian Stock Market, we have created a full 15-Video Course for you to help you get up to speed on how to look for great investments in Asia. Click here to find out more.

Ian Tai

Ian Tai is the founder of Bursaking.com.my, a platform that empowers retail investors to build wealth through ownership of fundamentally solid stocks. It is an essential tool that sifts out stocks that grow profits consistently from a database of over 900+ stocks listed mainly in Malaysia. As a Malaysian with close family ties in Singapore, Ian publishes a series of newsletters on how anyone can invest profitability in both countries.

Leave a Reply

Your email address will not be published. Required fields are marked *

9-things-to-know-about-kip-reit-value-invest-asia
Share This