Hektar Asset Management Sdn Bhd, the Manager of Hektar Real Estate Investment Trust (“Hektar REIT”), today announced the signing of a Sale and Purchase of Shares Agreement (“Share SPA”) to acquire a 90% equity interest in Terramark Sdn Bhd (“Terramark”) for RM26.0 million.
Terramark is a real estate holding company backed by a parcel of strategically located 198 acres land in Chuping, Perlis. The property is earmarked for private solar farm project to be developed pursuant to the development rights to be granted by Hektar REIT (via Terramark) to a secured Lessee cum project developer as part of the transaction.
Under this structure, Hektar REIT’s exposure is limited to the committed long-term triple-net lease ground lease component with built-in rental escalation, without direct participation and investment in the solar project.
The acquisition marks Hektar REIT’s move as the first Malaysia REIT to transact on pure ground lease model. Though the concept is new in Malaysia, ground lease models have been successfully implemented in more mature REIT markets such as the United States, demonstrating their viability and long-term value creation.
This landmark transaction further marks a pioneering move by a listed Malaysian REIT into the renewable energy sector, underscoring Hektar REIT’s strategy to future-proof its income streams and diversify into ESG-aligned asset classes.
This acquisition also provides strategic opportunities whereby Hektar REIT may potentially becomes the offtaker of clean energy generated by the solar farm at competitive energy rate for consumption across its properties portfolio to hedge operational costs against inflation and reduce its carbon footprint while enhancing its ESG performance metrics—in pursuit of enhanced triple-bottom line.
Chuping is an emerging industrial and commercial hub backed by government transformation plans. Once home to Malaysia’s sugarcane industry, the area is now transitioning toward high-value industrial and renewable energy projects.
Terramark land’s scale, topography, and high solar irradiation levels make it ideal for renewable energy – a far more lucrative use than traditional agriculture.
The acquisition of a equity stake in Terramark represents a strategic seed investment—a deployment of capital into a long-duration, ESG-driven assets that are expected to deliver inflation-protected, high-visibility income for decades to come.
This transaction is a material step in Hektar REIT’s diversification strategy, aimed at building a REIT model with embedded sustainability drivers, stable, long-duration low-risk rental income.
By investing in the land, Hektar REIT plays a catalytic role in reducing the capital outlay required for renewable energy developers, thereby lowering the barrier to entry and enhancing project bankability.
In addition to enabling faster deployment of clean energy infrastructure, it fosters long-term partnerships between the REIT and energy operators, generating stable, recurring income streams. Ultimately, the model is aimed at enhancing market participation and accelerating the move towards achieving Malaysia’s Net Zero target by 2050.
Zainal Iskandar, Executive Director and Chief Executive Officer of Hektar Asset Management, commented,
“This acquisition marks a quantum leap in Hektar REIT’s diversification strategy. By securing a prime solar-ready landbank, we are sowing the seeds for long-term, inflation-protected income while supporting Malaysia’s renewable energy goals.
Coupled with our rooftop solar rollout and recent industrial investment, this first move on pure ground-lease model positions Hektar REIT as a multi-asset platform creating sustainable value.
Globally, REITs integrating renewable infrastructure into their portfolios have seen increasing institutional investor interest, driven by the shift toward ESG mandates and stable yield profiles”
This strategic acquisition marks a pivotal shift in Hektar REIT’s long-term strategy to become a diversified, future-ready REIT with embedded sustainability at its core.
As part of its move to tap into high-growth and resilient income-producing assets, Hektar REIT will actively explore additional opportunities across renewable energy, light industrial assets, and integrated energy solutions to enhance unitholder value.
The Trust remains committed to building a resilient portfolio that aligns with global ESG standards, national energy transition priorities, and long-term income visibility.
or more information, please visit www.HektarREIT.com
