If you’re like me, always on the lookout for solid investments with good potential, Hektar REIT is one to keep on your radar. 

AmInvest recently updated their target price (TP) for Hektar REIT to RM0.85 per unit, down slightly from RM0.86. While this small change might raise some eyebrows, it’s tied to a minor delay in getting new anchor tenants up and running. 

The good news? The bigger picture for Hektar REIT looks very exciting.

Hektar’s malls are getting busier, and that’s always a good sign. The average occupancy rate across their properties is expected to rise from 85.6% in 3Q24 to 91.1% in 1Q25, thanks to new tenants moving in. 

Let’s break it down:

Central Square: A new anchor tenant started in November 2024, and another big player, Wonderpark, will kick off in 1Q25. Together, they’ll fill up to 45,000 sq. ft. of space, pushing the mall’s occupancy from 75.4% to 89.9%.

Segamat Central: Reconfigurations and better tenant management are paying off here. With a new anchor tenant, The Store, taking up 22,000 sq. ft., SC’s occupancy is set to improve from 72.4% to 81.4%.

Subang Parade: SP’s revamp is working wonders. Recent tenants like Game On, Padi House, and Sushi Kazoku have already boosted occupancy from 77.5% to 85.1%, and mini anchors like The Farm and Chan Rak BBQ will push it further to 86.5% in 1Q25.

At Segamat Central, they’re breaking up large spaces into smaller lots to bring in mini anchor tenants, which can offer higher rent per square foot. They’re also adding more food, beverage, and lifestyle stores, exactly what today’s shoppers want.

Here’s the kicker for investors: Hektar REIT is offering an 8.7% distribution yield for FY25F. That’s a healthy return, with a spread of 4.9% over Malaysia’s 10-year government bond yield. Plus, the full impact of new tenants will kick in from 1Q25, likely boosting revenue and income even further.

Adding more confidence to the story, Dato’ Ong Choo Meng, a substantial shareholder, has been increasing his stake in Hektar REIT. When someone with inside knowledge of the company is buying more shares, it’s often a great vote of confidence in its future prospects.