Friday, 3 February 2017, 11:30 HKT/SGT

Positive IPO notes from PublicInvest and RHB Research

KUALA LUMPUR, Feb 3, 2017 - (ACN Newswire) - Main Market-bound first hybrid community-centric retail Real Estate Investment Trust, KIP REIT recently held its balloting ceremony at Malaysian Issuing House Sdn. Bhd.(MIH) where its 10,200,000 Offer Unit made available to the Malaysian Public has been oversubscribed by 5.07 times. The Institutional Offering of 220,650,000 Offer Units have also been oversubscribed.

PublicInvest and RHB Research have both issued IPO notes providing target prices of RM1.07 and RM1.09 respectively, paying particular attention to KIP REIT's relatively higher dividend yields and its potential asset injection pipeline. Key highlights of KIP REIT included its demographics of shoppers being low and middle income segments who shop at KiP Marts for daily provisions and necessities. This makes the tenancy base very resilient across all economic cycles.

Commenting on the oversubscription results, Lim Han Gie, Chief Executive Officer of KIP REIT Management said, "I am pleased that our Offer Units were oversubscribed. The results are evident that the Malaysian public as well as institutional investors view us favourably. We are grateful that the investors understand the business space we operate in and the opportunities it has to offer our REIT."

Through this 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 5 KiP Marts located in Tampoi, Kota Tinggi, Masai, Senawang and Melaka as well as a neighbourhood retail centre known as KiP Mall located in Bangi. The portfolios are strategically located in growing catchment townships in the Southern and Central regions of Peninsular Malaysia. Many of its tenants offer daily needs and basic necessities of the shoppers. Hence, its business model alludes to foresight and strength especially in adverse economic conditions when consumers become more prudent in spending and actively source for value-for-money products or services that are commonly found in KiP Mart.

Lim adds, "It is evident that our focus towards hybrid community-centric retail centres that cater to communities' need for fresh produce and daily essentials, coupled with our diversified tenant base and strategic geographical locations in growing catchment areas are what makes KIP REIT attractive. Helmed by a dedicated team of highly experienced board of directors, KIP REIT is committed to practice good corporate governance. We believe we will establish good, strong relationships with our new shareholders and receive continuous support from our tenants."

KIP REIT's Gross Rental Income for the past 3 financial years have been growing steadily from RM48.30 million in 2014, RM51.63 million in 2015 and RM53.0 million in 2016. These growth are achieved through rental increment, organic growth and acquisitions.

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 32.0% as at 30 September 2016. This would allow KIP REIT the opportunity to undertake borrowings for future acquisitions or any asset enhancement that it intends to make.

The Company has the First Rights of Refusal to potentially acquire five new KiP Marts or KiP Malls to be named eventually. These assets in the pipeline are located in Pahang, Kedah, Selangor and Negeri Sembilan. Of the five new properties, KiP Mall Kota Warisan is near completion.

KIP REIT is expected to list on the Main Market of Bursa Malaysia Securities Berhad on 6th February 2017. CIMB Investment Bank Berhad is the appointed Principal Adviser, Sole Bookrunner for the Institutional Offering and Underwriter for the Retail Offering of this IPO exercise.

About KIP REIT ( www.kipreit.com.my )

KIP REIT is a hybrid community-centric retail Real Estate Investment Trust with a geographically diversified portfolio in Peninsular Malaysia. The nature of KIP REIT's investment is long term, with a period of at least five years. The initial portfolio comprises of six (6) income producing Real Estate retail properties - five hybrid community-centric retail centres, known as Kip Mart in Johor, Melaka and Negeri Sembilan and a neighbourhood retail mall known as Kip Mall in Selangor.

The future prospects of KIP REIT could be achieved through the optimisation and asset enhancement by the management. The Manager have the 'right of first refusal' to expand KIP REIT in the future, through the acquisition of other KiP Marts in Johor, Pahang, Kedah, Selangor and Negeri Sembilan.

About KiP MART ( www.kipmart.com.my )

KiP Mart features hybrid community-centric retail centres offering fresh produce and daily essentials. Each Mart offers a unique retail mix of fresh market, supermarket, retail shops, car showrooms, F&B outlets and services.

KiP Mart's nation-wide footprint includes presence in the Southern region in the state of Johor and Melaka, Central region around the state of Selangor and Negeri Sembilan with plans to add more outlets in central region and move upwards to Northern region in the state of Kedah and East Coast region in the state of Pahang.

KIP Group develops, leases and manages all of its own KiP Marts.

About KiP Mall (www.kipmart.com.my)

KiP Mall Bangi is a five-storey shopping centre catering to communities within the low to medium income groups. The range of retailers and facilities in KiP Mall Bangi are similar to those of KiP Marts. KiP Mall Bangi also provides recreational facilities such as a bowling centre.

For more information, please contact:
RAPR Mileage Communications, appointed PR agency for KIP REIT
Tel: +603 2282 2333

Media
Irene Yeoh / Lennie Ong
Hp: +6012 3868873 / +60129703379
Email: ireneyeoh@raprmileage.com / lennie@raprmileage.com

Topic: Press release summary
Source: KIP REIT
Sectors: Daily Finance, Daily News
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