Hektar Asset Management Sdn Bhd, the manager for Hektar Real Estate Investment Trust (Hektar REIT) announced that as of the closing date of the Rights Issue exercise on 15th August 2017, the Manager had successfully received acceptance and excess applications for 69,087,149 Rights Units, representing an oversubscription of 8,121,088 Rights Units or approximately 13% over the total number of 60,966,061 Rights Units available for subscription under the Rights Issue.
The Rights Issue was carried out to part finance the acquisition of 1Segamat Shopping Centre, the only shopping centre in the prime area of Segamat, Johor.
1Segamat Shopping Centre is strategically located with very high traffic concentration and good connectivity, with a bridge connection to the main bus terminal of Segamat and a 3 minutes’ walk to the Segamat railway station. The property is also within close proximity to two (2) tertiary institutions, Universiti Teknologi Mara and the Johore campus of the Tunku Abdul Rahman University College which provides stable and regular customers to the shopping centre.
The shopping centre is currently enjoying 96% occupancy, with UO Superstore and Lotus Five Star Cinemas as its anchor tenants. Both UO Superstore and Lotus Five Star Cinemas are the only department store and purpose-built cinema respectively in Segamat town.
According to Chief Executive Officer of the Manager, Datuk Hisham bin Othman, 1Segamat is expected to contribute approximately 10% to the REIT’s portfolio based on the current earnings, and the acquisition is scheduled to complete by end August 2017.
With the completion of 1Segamat acquisition, Hektar REIT’s enlarged portfolio will then reach RM1.2 billion in value with a total of 2 million sq ft in net lettable area (NLA). The Manager intends to enhance the value of 1Segamat Shopping Centre, by bringing in more reputable national and international retailers, improve tenancy mix to broaden the shopping centre’s offerings, embark on aggressive marketing and promotional activities to increase shopper traffic and introduction of different rent structures to increase income stream.
The Manager also intends to upgrade the services at the mall following to industry best practices. In addition, Hektar will introduce its signature shopping centre services which includes a complete parents room, gift counter, well-managed guest service desk for shopper’s convenience that provides stroller and wheelchair facilities, a comfortable prayer room and restrooms that will encourage longer shopper’s dwell time in the shopping centre.
Hektar REIT’s renounceable rights issue exercise was undertaken at an issue price of RM1.11 per rights which was approximately 15% lower than theoretical ex-rights price (TERP) of RM1.31 per unit. The Rights Units are expected to be listed on the Main Market of Bursa Securities on 29 August 2017.