Listing Detail:
Listing Sought: Main Market
Issue Price: RM 1.00

Dates:
Offer Period Open: 30 Dec 2016
Offer Period Close: 16 Jan 2017
Tentative listing date: 6 Feb 2017

Number of shares:
Public Issue: 13,500,000
Offer for Sale: -
Private Placement: 220,650,000

Stock Code: KIPREIT

Official Announcement

INITIAL PUBLIC OFFERING OF 234,150,000 OFFER UNITS IN KIP REIT ("UNITS") COMPRISING THE ISSUANCE OF:

(I) 220,650,000 OFFER UNITS MADE AVAILABLE FOR APPLICATION BY MALAYSIAN INSTITUTIONAL INVESTORS AND SELECTED INVESTORS, INCLUDING BUMIPUTERA INVESTORS APPROVED BY THE MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY, AT THE INSTITUTIONAL PRICE BEING THE PRICE PER UNIT PAYABLE BY THE INVESTORS WHICH WILL BE DETERMINED BY WAY OF BOOKBUILDING ("INSTITUTIONAL PRICE"); AND

(II) 13,500,000 OFFER UNITS MADE AVAILABLE FOR APPLICATION BY THE MALAYSIAN PUBLIC, THE ELIGIBLE DIRECTORS AND EMPLOYEES OF THE MANAGER, THE VENDORS (AS DEFINED IN THE PROSPECTUS) AND ELIGIBLE ASSOCIATE COMPANIES OF THE PROMOTERS (AS DEFINED IN THE PROSPECTUS) AT THE RETAIL PRICE OF RM1.00 PER UNIT PAYABLE BY APPLICANTS ("RETAIL PRICE"), SUBJECT TO THE CLAWBACK AND REALLOCATION PROVISION IN CONNECTION WITH THE LISTING OF AND QUOTATION FOR 505,300,000 UNITS IN KIP REIT ON THE MAIN MARKET OF BURSA MALAYSIA SECURITIES BERHAD.

THE RETAIL PRICE IS PAYABLE IN FULL UPON APPLICATION AND SUBJECT TO REFUND OF THE DIFFERENCE, IN THE EVENT THAT THE FINAL RETAIL PRICE IS LESS THAN THE RETAIL PRICE. THE FINAL RETAIL PRICE WILL BE EQUAL TO THE LOWER OF: (I) THE RETAIL PRICE OF RM1.00 PER UNIT; AND (II) THE INSTITUTIONAL PRICE.

Company Overview

News: KIP REIT expects to raise RM234m from IPO

KUALA LUMPUR: KIP Real Estate Investment Trust (KIP REIT), which is en route to a listing on the Main Market of Bursa Malaysia Securities, is expected to raise RM234.2 million from its initial public offering (IPO).

The proceeds will be used mainly for the acquisitions of KIP REIT’s initial portfolio consisting of five KiP Marts – in Tampoi, Kota Tinggi, Masai, Senawang and Malacca – as well as a neighbourhood retail centre known as KiP Mall in Bangi. The assets are valued at RM580 million and have an average occupancy rate of 85% and above, with a yield of 6.54%.

KIP REIT’s IPO of 234.15 million offer units comprises the issuance of 220.65 million offer units (43.7%) for institutional and selected investors at a price to be determined by way of bookbuilding and 13.5 million offer units (2.7%) for retail investors at RM1 per unit.

Based on the enlarged share capital of 505.3 million units, the total market capitalisation of KIP REIT upon listing is estimated to be RM505.3 million.

It is the intention of KIP REIT’s manager KIP REIT Management Sdn Bhd to distribute up to 100% of KIP REIT’s distributable income for FY17 and FY18 and thereafter at least 90% of KIP REIT’s distributable income on a half-yearly basis.

KIP REIT Management CEO Lim Han Gie said its focus on hybrid (traditional wet market and conventional shopping centre) community-centric retail centres that cater to communities’ need for fresh produce and daily essentials, coupled with its diversified tenant base and strategic geographical locations in growing catchment areas, are what make KIP REIT attractive.

“KiP Mart is differentiated from the normal retail markets. We focus on the daily essentials. Although many people think the retail market is softening, our focus is on essentials and necessities, so we’re not that affected,” Lim said after launching the prospectus last Friday.

He said the targets of KIP REIT could be achieved through the optimisation and asset enhancement by the management. The manager has the “right of first refusal” to expand KIP REIT in the future, through the acquisition of other KiP Marts in Johor, Penang, Pahang, Kedah, Selangor and Negri Sembilan.

KIP REIT’s gross rental income for the past three financial years has been growing steadily from RM48.30 million in 2014, RM51.63 million in 2015 and RM53.00 million in 2016. It posted a net property income of RM32.76 million in 2014, RM38.27 million in 2015 and RM42.24 million in 2016.

Upon listing, KIP REIT’s debt-to-asset ratio will be 14.8%, which is below the average Malaysian REIT of 32% as at Sept 30, 2016. This will allow KIP REIT to undertake borrowings for future acquisitions or asset enhancement.

KIP REIT’s retail offering will close on Jan 16. It is expected to list on Feb 6.