PETALING JAYA (Jan 20): The general public portion of the initial public offering (IPO) of KIP Real Estate Investment Trust (KIP REIT), en route to list on the Main Market of Bursa Malaysia on Feb 6, has been oversubscribed by 5.07 times.
The hybrid community-centric retail REIT held its balloting ceremony at Malaysian Issuing House Sdn Bhd where 10,200,000 offer units were made available to the Malaysian public.
A total of 2,900 applications for 61,906,800 offer units were received from the public, representing a subscription rate of 5.07 times.
Meanwhile, the institutional offering of 220.65 million offer units have also been oversubscribed.
KIP REIT Management CEO Lim Han Gie (pictured) said the subscription results showed that the Malaysian public as well as institutional investors view the REIT favourably.
“I am pleased that our offer units were oversubscribed. We are grateful that the investors understand the business space we operate in and the opportunities it has to offer our REIT,” he added.
Through the IPO exercise, KIP REIT expects to raise approximately RM234.2 million to be used mainly for the acquisitions of the REIT’s initial portfolio consisting of five KiP Marts located in Tampoi, Kota Tinggi, Masai, (all three in Johor), Senawang (Negri Sembilan) and Melaka as well as a neighbourhood retail centre known as KiP Mall located in Bangi, Selangor.
The company has the First Rights of Refusal to potentially acquire the five KiP Marts and the retail centre.
The retail properties are located in growing catchment townships in the Southern and Central regions of Peninsular Malaysia. Many of its tenants offer daily needs and basic necessities to the shoppers.
Upon listing, KIP REIT’s Debt to Asset Ratio will be approximately 14.8%, which is lower than that of the average Malaysian REIT, of approximately 32% as at Sept 30, 2016. This would allow KIP REIT the opportunity to undertake borrowings for future acquisitions or any asset enhancement that it intends to make.