Hektar REIT Closes RM30mil Bayan Lepas Factory Buy at a 7.5% Triple-Net Yield

Hektar REIT has completed its RM30 million purchase of a factory complex in Phase 4 of the Bayan Lepas Free Industrial Zone, closing the deal on 8 July 2026 — roughly sixteen and a half months after it was first announced to Bursa Malaysia on 19 February 2025, and a full year later than the timetable set out in that announcement. It is the first industrial asset in the portfolio of what has been, since 2006, Malaysia's first listed retail-focused REIT.

For the industrial market in Penang, the interesting part is not the size of the cheque. It is that a REIT has to publish its numbers.

What changed hands

The vendor was Microlead Precision Technology Sdn Bhd (MPT), a wholly owned subsidiary of Bursa-listed MQ Technology Bhd. The property, held under PN 5908, Lot 14840, Mukim 12 in the District of Barat Daya, is a leasehold site of about 7,657 sq m — roughly 82,400 sq ft — carrying two blocks of single-storey factory annexed with double-storey offices, plus one block of three-storey production area and office building.

MTrustee Berhad signed the conditional sale and purchase agreement as trustee for Hektar REIT on 19 February 2025. The transaction was classified as a non-related party transaction under Chapter 10 of Bursa's Main Market Listing Requirements.

It is not a generic shed. Hektar described a facility built around semiconductor work — able to take clean rooms, precision manufacturing and high-power operations, with modular space that can be reconfigured as processes change, sitting close to the Penang Bridge and the port and inside the supplier ecosystem that has grown up around the zone over four decades.

The numbers

• Price: RM30 million, cash
• Discount: 9.1% below independently assessed market value
• Basis of that valuation: the income method approach
• Initial yield: 7.5%, on a triple-net basis
• Average yield over the lease: 8.1%, as escalations compound
• Lease: 15-year triple-net master lease back to MPT, with an option to extend for a further 15 years
• Escalation: 5% every three years

The valuation basis is worth pausing on. The market value that the 9.1% discount is measured against was derived on the income approach — that is, from the rent the building produces, not from comparable sales of factories nearby. For a property being bought with its own fifteen-year lease already attached, that is the sensible method. But it does mean the discount is a discount to a capitalised income figure, not to what the neighbours sold for.

On the land alone, RM30 million across about 82,400 sq ft works out near RM364 per sq ft — though that is a blunt marker, because the price is buying a tenanted building with fifteen years of contracted income, not a bare site. Running the arithmetic the other way, a 7.5% initial yield on RM30 million implies contracted rent of roughly RM2.25 million a year, or about RM187,500 a month, before the first escalation.

That is the figure worth writing down. Triple-net means the tenant carries the assessment, insurance and maintenance, so 7.5% is close to a clean return to the landlord — not a gross number that shrinks once outgoings are paid.

Why the vendor sold

MPT did not move out. It sold the buildings it operates from and signed straight back into them for fifteen years. A sale-and-leaseback converts a factory sitting on the balance sheet into RM30 million of cash while the production line keeps running — attractive for a manufacturer that would rather fund equipment, expansion or debt reduction than own the shed.

Hektar's own framing was diversification: a step into the advanced manufacturing and technology supply chain, and away from a portfolio that had been almost entirely shopping centres. The purchase expands assets under management by about 2.2% and brings the portfolio to eight properties — six retail centres, the Kolej Yayasan Saad education asset in Ayer Keroh, Melaka, bought for RM148.5 million in July 2024, and now Bayan Lepas.

A year later than the filing promised

The February 2025 announcement told the market the transaction was expected to complete in the second half of 2025. It completed on 8 July 2026.

Zainal Iskandar Ismail, Executive Director and Chief Executive Officer of Hektar Asset Management, was direct about the delay: "While the process took longer than anticipated due to regulatory approvals, we are confident that the strategic and financial merits of this asset fully justify the investment."

The paper trail shows how long it dragged. As at 31 March 2025 — six weeks after the announcement — Hektar's quarterly report still listed RM24.0 million of the purchase consideration as an outstanding capital commitment, meaning only the deposit had moved. The Q1 FY2025 press release in May 2025 could say no more than that the acquisition was progressing as planned.

Anyone who has transferred a leasehold industrial title inside a free industrial zone knows why. State consent on a leasehold transfer, zone-authority clearance and the lender's side of it stack up, and none of them run to a buyer's timetable. Sixteen months between signing and completion on a clean, agreed, non-related-party deal is not an outlier — it is what an owner should budget for, and it is a year longer than a listed buyer with advisers on both sides thought it would take.