Hektar REIT Acquires Strategic Land in Melaka, Strengthening Position in Education Sector
In a move to further diversify its income-generating asset base, Hektar Real Estate Investment Trust (KL:HEKTAR) has announced the acquisition of two leasehold land parcels in Durian Tunggal, Melaka—totalling 41.8 acres—for RM40 million.
The land will support long-term education operations tied to Kolej Yayasan Saad (KYS), a premium fully residential school founded by prominent businessman Tan Sri Halim Saad. The deal also reflects Hektar REIT’s ongoing strategy to reduce retail-only reliance by expanding into the resilient education sector.
Deal Structure: Land + Lease with Long-Term Upside
According to Hektar’s Bursa Malaysia filing:
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Buyer: MTrustee Bhd (as trustee of Hektar REIT)
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Seller: KYS College Sdn Bhd
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Size: 6.3 acres + 35.5 acres = 41.8 acres
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Location: Durian Tunggal, Melaka (near North-South Expressway)
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Purchase Price: RM40 million
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Lease Terms:
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30-year triple net lease with 10% rental escalation every three years
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Extension option: Up to 30 more years or until leasehold expiry
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Lessee: KYSA Education Sdn Bhd (KYS campus operator)
This follows Hektar’s RM150 million acquisition of the KYS education campus in 2023, marking its first non-retail asset and the start of a broader institutional diversification strategy.
Why This Matters: Education as a Defensive Asset Class
Education-linked assets—especially long-term, leased campuses—offer:
✅ Stable cash flow backed by operating institutions
✅ Resilience during economic cycles (particularly in premium K–12 and tertiary education)
✅ Capital growth potential through future asset enhancement or development
✅ Alignment with ESG priorities through community and knowledge-based assets
“This deal sets the stage for phased development and potential future asset acquisition, offering long-term income growth tied to gross floor area expansion,” said Hektar REIT.
The REIT emphasized that while this acquisition is currently land-only, it opens the door to acquiring completed education facilities in future phases, enhancing rental yields and valuation.
Location Spotlight: Durian Tunggal, Melaka
The land parcels are strategically located in Durian Tunggal, a rising institutional and suburban zone in Melaka:
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Direct access to the North-South Expressway (PLUS)
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Home to KYS campus, industrial parks, and higher learning institutions
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Near expanding townships and commercial hubs like Ayer Keroh and Hang Tuah Jaya
This location is attractive for education-focused developments, institutional expansions, and long-term leasing models.
Related Party Transaction and Governance Note
The acquisition is classified as a related-party transaction due to Nor Sabrina Halim, daughter of KYS founder Tan Sri Halim Saad, serving as a board member of Hektar Black Sdn Bhd, a major unitholder of Hektar REIT.
Hektar REIT clarified that proper disclosure and governance procedures are in place and that the transaction aligns with its fiduciary duty to unitholders.
Implications for REIT Investors and Real Estate Market
Hektar’s Melaka land acquisition highlights a few key trends:
1. Diversification beyond malls
REITs are increasingly turning to alternative real estate sectors—education, healthcare, data centers—to offset volatility in retail.
2. Triple net leases gaining traction
Long-term leases with built-in rental escalations offer predictable returns and lower management burden.
3. Institutional capital in emerging locations
Durian Tunggal may see increased institutional presence, especially as education and wellness infrastructure expands across Melaka.
Final Thoughts: A Smart Long-Term Play on Institutional Real Estate
Hektar REIT’s RM40 million acquisition of education-linked land shows how REITs can unlock value in non-traditional asset classes while supporting nation-building sectors like education.
With future developments likely to follow, this move could set a precedent for REIT-backed education infrastructure models in Malaysia.
