KUALA LUMPUR (July 3): WCT Holdings Bhd (KL: WCT), whose share price surged to a near five-year high on Wednesday, has proposed to establish a real estate investment trust (REIT) comprising its retail properties, and list it on the Main Market of Bursa Malaysia.

This will allow the group to unlock the value of its investments in the properties, the construction and property group said in a bourse filing.

It said the proceeds to be raised from the REIT listing will be used to pare down borrowings and capitalise on strategic business opportunities.

According to WCT's 2023 annual report, the group owns the Bukit Tinggi Shopping Centre in Klang, Paradigm Mall in Petaling Jaya and Paradigm Mall in Johor Bahru.

It also owns two airport malls, namely gateway@klia2 in Sepang and SkyPark Terminal in Subang.

The five malls have a combined retail lettable area of 3.4 million sq ft.

WCT currently has a long-term lease arrangement with AEON Co (M) Bhd (KL: AEON) for its flagship retail project, the Bukit Tinggi Shopping Centre, while the other four malls are managed by the group's wholly-owned subsidiary WCT Malls Management Sdn Bhd.

The retail property business is part of the group's property investment and management division. Besides shopping malls, this division also owns and manages hotels and business aviation assets.

WCT has appointed Maybank Investment Bank Bhd as its principal adviser for the REIT establishment and listing.

For the financial year ended Dec 31, 2023, WCT's property investment and management division reported an operating profit of RM121 million, up 22.9% from the previous year's RM157 million. The segment's revenue rose 17.9% to RM217 million from RM184 million.

The group attributed the increase in revenue to higher occupancy and rental rates for its malls, while the higher operating profit was also attributed to higher fair value gain on its investment properties.

WCT shares rose as much as 15 sen or 16.9% on Wednesday to RM1.04 — its highest since August 2019. At market close, the stock pared its gains to close at 98.5 sen, still up 9.5 sen or 10.7%, valuing the company at RM1.39 billion.