Sunway Real Estate Investment Trust (Sunway REIT) has recently announced its acquisition of Kluang Mall located in Kluang, Johor for RM158 million. This move is part of Sunway REIT’s strategy to expand its portfolio and geographical footprint to central Johor, catering to the needs of over 320,000 residents in the Kluang district and attracting a potential market of around one million people in the surrounding areas.
The property, a free-standing four-storey shopping complex, boasts a gross floor area of approximately 808,000 sq. ft. and a net lettable area of about 360,000 sq. ft. With approximately 920 car park bays, the mall is well-equipped to cater to the needs of shoppers in the area. Currently, the property is 99% occupied with over 130 tenants, anchored by Pacific Hypermarket & Department Store, along with a variety of food and beverage outlets, lifestyle, and entertainment offerings.
Sunway REIT expects the property to generate an indicative net property income (NPI) yield of approximately 6.8%, outperforming its portfolio NPI yield of 5.7% for the financial year ended Dec 31, 2023. This acquisition will increase Sunway REIT’s assets under management (AUM) to RM9.8 billion, solidifying its position as the second-largest listed REIT in Malaysia by AUM.
Chief Executive Officer of Sunway REIT Management Sdn Bhd, Clement Chen, expressed his excitement about the acquisition, highlighting the strong occupancy and growth potential of Kluang Mall. Drawing on the success of their previous rejuvenation projects, Chen is confident in adding value and unlocking the potential of Kluang Mall in an underserved area.
The proposed acquisition is seen as an opportunity to capitalize on the untapped potential within the central Johor area, especially with the upcoming completion of the Gemas – JB Electrified Double Tracking rail project and ongoing road improvement works along the Batu Pahat – Ayer Hitam – Kluang federal route. Sunway REIT Management is optimistic about the growth prospects of Kluang Mall and aims to replicate the success of their previous projects in rejuvenating and enhancing the mall’s offerings.
With the expected completion of the acquisition by the fourth quarter of 2024, Sunway REIT is set to further strengthen its presence in the Malaysian real estate market and deliver value to its investors. The acquisition of Kluang Mall represents a strategic move for Sunway REIT, aligning with its growth objectives and commitment to enhancing its portfolio for long-term sustainability and profitability.