We came away from KIP REIT’s 1HFY24 results briefing feeling upbeat on the trust’s near-term prospects. Key takeaways are below:

Transforming Community Malls for a Vibrant, Fresh Shopping Experience

The management is committed to redefining everyday community malls, aiming to create vibrant spaces that revolutionize the local shopping experience. According to management, the imminent completion of the major Asset Enhancement Initiative (AEI) for KIPMall Bangi is expected to elevate the occupancy rate at KIP Mall Bangi to over 90%, surpassing the current rate of 81.2%. Additional AEI projects are planned for FY24, including the renovation of a new supermarket, ST Rosyam, at KIPMall Senawang, covering an expansive area of 51,000 sq ft. The renovation is slated for completion by September 2024.

Portfolio Occupancy Continue to Improve

In 2QFY24, KIP REIT achieved an unprecedented milestone with its average portfolio occupancy rate reaching an all-time high of 94.7%, a notable increase from the previous quarter’s 94.1%. The improvement in occupancy was primarily fuelled by KIPMall Kota Tinggi, where the commencement of operations by a new anchor tenant, Hwa Twai Supermarket, in August propelled the occupancy rate from 84.4% to an impressive 93.1% within the quarter. Demonstrating overall resilience, all assets under management have consistently maintained occupancy rates surpassing 90%, with exceptions noted for KIP Mall Bangi at 81.2% and KIP Mall Senawang at 85.2%. The occupancy rate at KIP Mall Bangi reflects the impact of ongoing significant renovations. On the other hand, an optimistic outlook is anticipated for KIPMall Senawang, with expectations that the occupancy rate will exceed 90%, driven by the introduction of the new supermarket, ST Rosyam, which is anticipated to occupy double the space compared to the previous tenant

Transforming Community Malls for a Vibrant, Fresh Shopping Experience

The management is committed to redefining everyday community malls, aiming to create vibrant spaces that revolutionize the local shopping experience. According to management, the imminent completion of the major Asset Enhancement Initiative (AEI) for KIPMall Bangi is expected to elevate the occupancy rate at KIP Mall Bangi to over 90%, surpassing the current rate of 81.2%. Additional AEI projects are planned for FY24, including the renovation of a new supermarket, ST Rosyam, at KIPMall Senawang, covering an expansive area of 51,000 sq ft. The renovation is slated for completion by September 2024.

Portfolio Occupancy Continue to Improve

In 2QFY24, KIP REIT achieved an unprecedented milestone with its average portfolio occupancy rate reaching an all-time high of 94.7%, a notable increase from the previous quarter’s 94.1%. The improvement in occupancy was primarily fuelled by KIPMall Kota Tinggi, where the commencement of operations by a new anchor tenant, Hwa Twai Supermarket, in August propelled the occupancy rate from 84.4% to an impressive 93.1% within the quarter. Demonstrating overall resilience, all assets under management have consistently maintained occupancy rates surpassing 90%, with exceptions noted for KIP Mall Bangi at 81.2% and KIP Mall Senawang at 85.2%. The occupancy rate at KIP Mall Bangi reflects the impact of ongoing significant renovations. On the other hand, an optimistic outlook is anticipated for KIPMall Senawang, with expectations that the occupancy rate will exceed 90%, driven by the introduction of the new supermarket, ST Rosyam, which is anticipated to occupy double the space compared to the previous tenant

Source: TA Research - 2 Feb 2024