Hektar Asset Management Sdn Bhd, the Manager of Hektar Real Estate Investment Trust (“Hektar REIT”), announced its Q2 FY2025 results for the period ended 30 June 2025, showcasing continued portfolio growth.
Hektar REIT achieved total revenue of RM32.0 million in Q2 FY2025, up 3.4% from the prior quarter. Net Property Income (“NPI”) rose by 5.6% to RM15.9 million, bolstered by enhanced rental income and effective cost management, leading to an NPI margin improvement to 49.6%.
For 2Q25 YTD, the REIT recorded revenue of RM62.9 million and NPI of RM30.9 million, reflecting a decline of 3.1% and 12.1% year-on-year, respectively, due to a one-off income of RM4.0 million from the previous year. The underlying performance remains healthy, with a focus on long-term growth.
The Board declared an interim income distribution of 1.05 sen per unit for Q2 FY2025, totaling RM7.45 million.
In terms of asset composition, retail assets contributed RM58.8 million or 93.4% of total YTD revenue and RM26.7 million or 86.6% of NPI. Meanwhile, the education asset segment, contributed RM4.1 million in revenue and the full 13.4% of NPI, underscoring its growing strategic role in the portfolio.
Hektar, once primarily a retail REIT, is now diversifying into education, industrial, and renewable energy sectors while still improving its retail properties. This shift aims to provide more stable, long-term income. Key initiatives include acquisitions of: –
- Education assets consisting of Kolej Yayasan Saad (KYS), Melaka , provides stable, inflation-hedged income under triple net lease structures, contributing 13.4% of NPI year-to-date.
- Industrial assets, including the ongoing acquisition of a 15-year triple net master-leased industrial property in Penang, designed to generate secure recurring income without operational exposure.
- Strategic land parcels supported by triple-net lease arrangements, adding fixed-yield, low-risk revenue via a ground lease model.
This approach reduces reliance on the cyclical retail sector, minimising operational risks, and is expected to generate clean net income, free from one-off or volatile components, thereby enhancing distributable profits.
Despite cautious retail sentiment and macroeconomic uncertainties, the Manager remains optimistic about the REIT’s long-term prospects. Ongoing initiatives, including the repositioning of Subang Parade, are on track for phase 1 completion by 1H26, which is expected to enhance footfall, occupancy, and rental income. Additionally, solar panel installations across Hektar’s portfolio are set for completion by 4Q25, with anticipated RM2 million savings in 2026.
Zainal Iskandar, Executive Director and Chief Executive Officer of Hektar Asset Management, said, “We are encouraged by the continued momentum achieved in the second quarter of 2025. Our proactive approach in leasing strategy, alongside diversification into education, industrial assets and strategic ground leases provide a resillient foundation for sustainable returns and long term growth. We remain focused on optimising our core retail portfolio while enhancing value creation through disciplined capital management and ESG-led initiatives.”
As of 30 June 2025, Hektar REIT’s total assets were RM1.45 billion, with a net asset value per unit of RM1.0462. Hektar REIT is dedicated to providing stable distributions to unitholders through effective asset management, cost control, and a diversified income strategy.