REIT buys 1Segamat, the city’s sole shopping centre

Malaysia’s Hektar Real Estate Investment Trust has acquired the 1Segamat Shopping Centre in Johor.

The property has retail space of 223,439 sqft (20,758 sqm) with a 96.4 per cent occupancy rate, and the deal is expected to be completed by year end, reports The Star, quoting the RHB Research Institute.

“As the only shopping mall in Segamat, we believe its strong market position would help mitigate the downside in earnings for other retail assets in the portfolio,” says an institute report.

Hektar REIT proposed acquiring the centre from EcoFirst Consolidated’s unit Tashima Development for RM104 million (US$24.2 million) in June last year, when Segamat’s population was projected by Department of Statistics Malaysia to reach 198,000.

“We expect retail business to remain challenging this year,” says RHB Research. “While new brands were introduced to improve the tenancy profile of the mall, the weak retail sentiment has not helped lift rental growth.”

Hektar REIT’s second-quarter net property income fell by 4.5 per cent to RM18.04 million, mainly because of higher running expenses. Revenue eased 0.5 per cent to RM30.79 million.

* Photo courtesy: ecofirst.com.my

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