Kuala lumpur: Hektar Real Estate Investment Trust (Hektar REIT) has put forward a proposal to acquire the leasehold interest in a 2.43-hectare plot in Setapak, Kuala Lumpur, which houses the KYS KL East International School (KYSKLEIS), for RM125 million.

According to BERNAMA News Agency, MTrustee Bhd, representing Hektar REIT, has signed a conditional agreement with KYS College Sdn Bhd (KCSB) for this transaction. The purchase will involve a cash payment of RM106.55 million, complemented by the issuance of units in Hektar REIT to the vendor, as per a filing with Bursa Malaysia.

Hektar REIT noted that KCSB holds a 30-year ground lease on the land commencing from March 1, 2016, and concluding on February 28, 2046, under a master lease agreement with Sime Darby Property (KL East) Sdn Bhd. The acquisition and lease proposal depends on extending the MLA lease to 99 years through a supplemental agreement with the lessor and the timely completion of a secondary school building by KCSB.

Currently, the site includes a pre-school and a primary school building, part of a larger 3.84-hectare freehold property owned by Sime Darby Property (KL East). Following the acquisition, Hektar REIT plans to grant a sub-lease to KCSB, allowing the continued operation of KYSKLEIS.

The deal, which involves a sale and leaseback arrangement, is expected to provide Hektar REIT with a long-term lease of up to 99 years, ensuring fixed and contractually secured rental income from the sub-lessee. The completion of this transaction is anticipated in the first quarter of 2027, subject to unforeseen circumstances.

UOB Kay Hian (M) Sdn Bhd has been appointed as the principal adviser for this proposed acquisition and lease.