KL International School Campus Faces a Contested Unitholder Vote This Month
Shareholders of Hektar REIT are split ahead of a November 16 meeting to approve a RM125 million acquisition of the KYS KL East International School campus, the third deal in three years linking the trust to the same school group.
Unitholders of a Kuala Lumpur-listed property trust are set to vote on November 16 on whether to approve a RM125 million acquisition of an international school campus in the city's Setapak district, in a deal that has stirred pushback over its related-party ties.
Hektar Real Estate Investment Trust, which manages a portfolio of retail malls across Malaysia, has proposed buying and leasing back the campus of KYS KL East International School from its operator, KYS College Sdn Bhd. Under the terms, the school would continue to run its Cambridge curriculum programme under a sub-lease of up to 99 years, paying rent to Hektar REIT at RM3.30 per square foot monthly, with a 10 per cent escalation built in every three years.
The deal is the third in three years involving Hektar REIT and entities connected to Tan Sri Halim Saad, founder of the Kolej Yayasan Saad education group. The transaction was flagged as related-party because Halim's daughter, Nor Sabrina Halim, sits on the board of Hektar Black Sdn Bhd, which holds a 17.5 per cent stake in the REIT, according to The Edge Malaysia. Dissatisfied unitholders have been vocal since the acquisition was announced in May, particularly over the frequency of transactions linking the REIT to the same school group.
What unitholders are voting on
Unitholders are being asked to approve the issuance of up to 42 million new Hektar REIT units, alongside a cash payment of RM106.55 million, to fund the RM125 million purchase. An independent adviser has concluded the transaction is fair and reasonable and has recommended a yes vote. Bursa Malaysia gave the green light for the new unit issue in August 2026. If the resolution passes, the deal is expected to complete in the first quarter of 2027.
KYS KL East International School opened in 2023 and occupies a purpose-built campus in the KL East development zone, with capacity for up to 1,300 students. It offers preschool through Year 11 under the Cambridge International Curriculum. The school itself is not changing operators; only the ownership of the physical campus is moving from the operator to the REIT.
What it means for families
For families enrolled at KYS KL East, the immediate concern is fees. The contractual rent escalation clause binds KYS College to rising occupancy costs over the long term, which operators in comparable sale-and-leaseback arrangements have historically passed on through tuition adjustments. The 10 per cent step-up every three years is modest, but it removes the operator's flexibility to hold the line on property costs in lean years.
The broader question is what happens if the November 16 vote fails. Should unitholders reject the acquisition, the school's property arrangements would need to be renegotiated, and Hektar REIT's strategy of diversifying into education assets — begun with the purchase of the main KYS college campus in 2024 — would stall. The contested vote is the clearest signal yet that some investors are uncomfortable with how closely the REIT's growth has tracked one family's school empire.