- Strategic entry into industrial real estate sector strengthens portfolio diversification and supports portfolio rebalancing for greater resilience.
- Acquisition completed at a discount of 9.1% to market value, delivering an attractive initial yield of 7.5% on a triple net lease structure.
- Asset strategically positioned within the Bayan Lepas Free Industrial Zone, Penang, a globally recognised semiconductor hub with strong capital appreciation potential.
Hektar Real Estate Investment Trust (“Hektar REIT”), is pleased to announce the completion of the acquisition of its first industrial property located within the Bayan Lepas Free Industrial Zone, Penang. The property underscores the REIT’s commitment to investing in high-growth sectors and supporting critical supply chain operations.
The acquisition, transacted at RM30,000,000 represents a discount of 9.1% to the property’s independently assessed market value while delivering an initial yield of 7.5% on a triple net lease basis, with all property-related outgoings including taxes, insurance, and maintenance borne by the tenant. This structure provides Hektar REIT with direct, passive income over the full lease term with minimal operational burden. In addition, the 15-year long-term lease agreement provides a stable income stream for Hektar REIT with fixed rental escalation that reflects the strong demand for specialized industrial space.
This acquisition is a pivotal addition to Hektar REIT’s existing portfolio in diversifying towards the industrial sector, enhancing its footprint in the advanced manufacturing and technology supply chain while balancing the REIT’s portfolio to reduce concentration on the retail sector. This transaction aligns with Hektar REIT’s strategic focus on acquiring mission-critical assets in high-demand markets. This acquisition brings Hektar portfolio to a total number of eight (8) properties including shopping malls and a private school.
The Bayan Lepas Free Industrial Zone has long been recognised as a cornerstone of Asia’s electronics and semiconductor manufacturing ecosystem, earning its reputation as the “Silicon Valley of the East.” The Zone continues to attract leading global semiconductor companies, anchored by a world-class ecosystem of skilled talent, research institutions, logistics infrastructure, and established supply chain networks.
The acquired light industrial property boasts a range of features tailored to the unique needs of semiconductor production and distribution, including:
- Advanced Infrastructure: Designed to accommodate clean rooms, precision manufacturing, and high-power requirements essential for semiconductor operations.
- Strategic Location: Proximity to key transportation networks (Penang Bridge and Port), supply chain hubs, and an established ecosystem of semiconductor manufacturers and suppliers.
- Flexibility: Modular spaces that allow for future adaptability, ensuring the facility remains relevant amid evolving technological needs.
- Talent Access: Proximity to a deep, specialised workforce with established expertise in semiconductor engineering and advanced manufacturing.
Zainal Iskandar, Executive Director and Chief Executive Officer of Hektar Asset Management, said, “The completion of this acquisition is a significant milestone for Hektar REIT. It reflects our disciplined approach to capital allocation and our commitment to building a more resilient, diversified portfolio that is positioned to generate sustainable returns for our unitholders. While the process took longer than anticipated due to regulatory approvals, we are confident that the strategic and financial merits of this asset fully justify the investment. We remain focused on identifying further opportunities in high-growth, non-retail sectors that complement our existing portfolio.”
With the completion of this acquisition, Hektar REIT is well-positioned to continue its strategic expansion into industrial and other non-retail asset classes. The Trust remains committed to investing in properties that support critical industries, drive long-term value creation, and deliver consistent, sustainable returns to its stakeholders.
