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Most asked questions
The Deed is available for Unitholders' inspection at the office of Hektar Asset Management Sdn Bhd ("Manager") and at the principal place of business of AmTrustee Berhad ("Trustee"). Please call ahead to make an appointment. For details, please click here.
Hektar REIT is a real estate investment trust established on 5 October 2006 and listed on the Main Market of Bursa Malaysia Securities Berhad ("Bursa Securities") on 4 December 2006. Hektar REIT's investment objective is acquiring and investing in real estate and real estate-related assets, primarily used for retail purposes, such as shopping centres.
As at 31 March 2010, a total of 320,001,000 Units were in issue.
A REIT is a collective investment scheme where funds from investors are pooled and invested towards a specified goal as set out in the investment objective of the fund. In addition, a REIT is a fund that invests (via funds raised from investors) in a portfolio of real estate assets or real estate-related assets. These real estate assets generate income from rent collected from tenants, which is then, net of expenses, distributed to investors at regular intervals. REITs may be listed or unlisted.
A REIT is constituted by a trust deed entered into between the manager and the trustee. The trust deed sets out the manner in which the REIT or scheme is to be administered, the valuation and pricing of units, the keeping of proper accounts and records, the collection and distribution of income, the rights of unitholders, the duties and responsibilities of the manager and trustee with regard to the operations of the scheme, and the protection of unitholders' interests. The trust deed is registered with the Securities Commission of Malaysia ("SC").
The tripartite relationship between the manager, the trustee and the unitholders in a REIT is illustrated below:
A brief description of the parties in a REIT is as follows:
The manager is appointed to manage and administer the REIT in accordance with the objectives and investment policy of the REIT. The manager is obliged to administer the REIT in accordance with the trust deed, the Securities Commission Act 1993 ("SCA") and the SC Guidelines on REITs, and to administer the REIT in an efficient and proper manner that will ensure high standards of integrity and fair dealing in managing the REIT to protect the interest of unitholders, to exercise due care, skill and diligence as well as effectively employ the resources and procedures necessary for the proper performance of the REIT.
The trustee is appointed for the unitholders and acts as the custodian for all the assets of the REIT. The trustee, therefore, must act to ensure that the manager adheres strictly to the provisions of the trust deed, particularly with regard to the creation of units, the exercise of investment powers of the REIT, collection and distribution of income, proper record keeping of administrative, investment and unitholders' transactions and in upholding unitholders' interests.
The interest of a unitholder in the REIT is an equitable interest of a beneficiary of a trust, subject to the terms of the trust deed. Unitholders shall be entitled to receive the distributions of the fund and such other rights as provided in the trust deed.
Other relevant parties:
The property management company is appointed to manage the real estate assets of the REIT.
REITs offer investors the following benefits:-
(a) Ownership of investment grade real estate
By pooling capital sources, REITs can invest in large-scale investment grade commercial properties, which are typically out of reach of the ordinary retail investor. By investing in a REIT, an investor owns a 'pro-rata' share of the trust.
(b) Professional management
REITs are typically managed by experienced and professional managers. These managers are in turn overseen by an independent trustee and regulated by the Securities Commission.
(c) Stable dividend returns
REITs typically provide relatively stable cash flows since the majority of its revenue is generated by rentals under the terms of lease agreements with its tenants. These agreements are for specific durations, and may be subject to tenancy extensions.
(d) Potential capital appreciation
In addition to distributing dividend income at regular intervals, REITs also provide an opportunity for capital appreciation via any increase in the value of real estate held in its portfolio. In the case of a listed REIT, the unit price may appreciate subject to macroeconomics conditions, stock exchange sentiments and fund performance.
REITs enable investors to further diversify their investments by providing them the opportunity to pool their resources for the purchase of a diversified portfolio of authorised investments in real estate or real estate related assets. Further, investors in a REIT can usually access a broader range of real estate than they could invest on their own.
In a listed REIT, units are generally more liquid as they are traded on a stock exchange and investors may purchase additional units or dispose all or part of their units on any market day on the stock exchange.
REITs are exposed to a variety of risks associated with the investments and management of, and returns from the REITs. An investor should carefully consider the following summary of risk factors and should consult a professional advisor as to the legal, business, financial and tax related aspects of investing in a REIT. This list is not exhaustive and further information may be obtained from the Initial Public Offering ("IPO") Prospectus.
- Economic, political and regulatory risks;
- Capital market risk;
- Fund management risk; and
- Risk of non-compliance.
Investment & Operational Risks
- Operating history;
- Investment policies may change;
- Dependence on key personnel;
- Dividend distribution not guaranteed;
- Limitations on borrowings;
- Risk associated with borrowings and interest rates;
- Insurance risk;
- Risk relating to investments in real estate;
- No redemption of Units;
- Future dilution of the NAV of the Units;
- Effects of possible sale of a substantial number of Units by substantial Unitholders;
- Potential conflicts of interest;
Risks relating to Real Estate Assets
- Gross rental income and the value of the portfolio may be affected by a number of factors;
- Increase in operating and other expenses;
- Dependence on key tenants;
- Adequacy of insurance coverage;
- Compulsory acquisition by the government;
- Non-registration of the transfer of real estates; and
- Subsequent disposal of real estates.
Investors should familiarise themselves with the following performance indicators of REITs:
(i) Dividend Per Unit ("DPU") Yield
The ratio of the distribution paid to unitholders, known as the Dividend Per Unit (DPU) from the REIT's income to the price paid for the units of the REIT.
(ii) Net Asset Value ("NAV")
NAV represents the total assets of a company after subtracting all its liabilities.
(iii) Management Expense Ratio ("MER")
The ratio of expenses incurred in operating a REIT to the NAV of the REIT. These expenses include the annual management fee, the annual trustee fee, valuation and auditors' fees and miscellaneous costs of administration, but exclude direct property operating expenses. The MER is published in the annual and interim reports.
(iv)Average Annual Return
This is the percentage change in a REIT's price for the period under review. This indicator allows investors to compare the annualised return of the REIT with other forms of investment as typically expressed in 'per cent per annum'.
Hektar REIT incurs the following fees:
Annual Manager's fee: (i) Base Fee
Up to 1.0% per annum of the GAV of the Trust, payable monthly in arrears, excluding goods and services tax ("GST").
From FY2010, the base fee was 0.35% per annum of the GAV of the Fund, excluding GST.
(ii) Performance Fee
Up to 5.0% per annum of the NPI, before deducting the Property Manager's fee, payable monthly in arrears, excluding GST.
From FY2010, the performance fee was 5% per annum of the NPI, before deducting the PMC's fee, excluding GST.
(iii) Acquisition Fee
Up to 1.0% of the acquisition value of any Hektar REIT's assets being the real estate or any unlisted company whose principal assets are real estate, purchased by the Trustee for the Trust.
(iv) Divestment Fee
Up to 0.5% of the disposal value of any Hektar REIT's assets being real estate or unlisted company whose principal assets are real estate, sold or diversified by the Trustee.
Annual Trustee's Fee
Up to 0.1% per annum of the NAV of the Trust, including the manager's fees, payable annually in arrears, excluding GST.
For the thirteen (13) months financial period ended 31 December 2007, FYE 2008 and FYE 2009, the Trustees fees was 0.035% per annum of the NAV of the Trust, including the manager's fees, excluding GST.
Property Management Fee
- 5.0% per annum of the gross rental income on the first RM30,000;
- 3.0% per annum of the gross rental income on the residue up to RM100,000; and
- 2.0% per annum on the gross rental income on the residue over RM100,000.
Payable monthly in arrears (excluding GST), with no further additional claims charged.
Other Trust Expenses
- Auditor's fees;
- Valuation fees;
- Other relevant professional fees;
- Interest expense;
- Printing, posting and general expenses that are directly related and necessary for the administration of the Trust; and
- Property operating expenses.
Hektar REIT may be attractive to conservative or moderate risk investors with a long-term investment horizon, seeking regular dividend income and long-term capital appreciation potential. Investment in REITs are typically seen as less risky than direct investments in real estate or investments in shares but riskier than investments in fixed deposits or bonds. An investor should consult a professional advisor as to the legal, business, financial and tax related aspects before investing in a REIT.
Hektar REIT is listed on the Main Market of Bursa Malaysia Securities Berhad. You can buy units in Hektar REIT through your stockbroker. For investors outside Malaysia, please consult your local stockbroker who may deal in securities listed in Malaysia. Units in Hektar REIT are denominated in Malaysian Ringgit and sen.
To find a stockbroker or remisier in Malaysia, Bursa Malaysia Securities Berhad publishes a list of brokers on its website www.bursamalaysia.com.
The substantial Unitholders of Hektar REIT are:
- Frasers Centrepoint Trust - 99,400,000 units (31.06%)
- Hektar Premier Sdn Bhd - 87,800,000 units (27.44%)
- Hektar Black Sdn Bhd - 40,700,000 units (12.72%)
The electronic prospectus for Hektar REIT can be viewed or downloaded from the website of Bursa Malaysia Securities Berhad at www.BursaMalaysia.com.
To find the prospectus, please click here
- Select the 'By Company' tab on the top bar below Company Announcements and select 'H'.
- Click on 'Hektar Real Estate Investment Trust' and click on the subsequent paragraph.
- The contents of the prospectus in PDF may be downloaded or viewed online.
For convenience, the prospectus is downloadable in 16 parts from Bursa Malaysia's website as below. Please read the Notice.
- Notice (PDF) 12kb
- Cover Gatefold (PDF) 1Mb
- Inside Cover Gatefold (PDF) 666kb
- Responsibility Statements, Definitions, Contents (PDF) 639kb
- Corporate Directory, Summary, Public Offering, Risk Factors, pgs 1-37 (PDF) 1.3Mb
- REIT Introduction, Structure, Investment Strategies, Distribution Policy, pgs 38-57 (PDF) 759kb
- Subject Properties, pgs 58-92 (PDF) 1.3 Mb
- Acquisition of Subject Properties, Manager, Property Manager, Trustee, Approvals, pgs 93-127 (PDF) 1.3Mb
- Financial Info, Additional Info, Salient Terms, pgs 128-149 (PDF) 835kb
- Appendix I-III: Valuation Certificate, Reporting Accountant, pgs 150-174 (PDF) 831kb
- Appendix IV-VI, Reporting Accountant, Taxation, Independent Market Research Report, pgs 175-200 (PDF) 1.1Mb
- Appendix VI, Independent Market Research Report Part 2, pgs 201-215 (PDF) 818kb
- Appendix VI, Independent Market Research Report Part 3, pgs 216-235 (PDF) 1Mb
- Appendix VI, Independent Market Research Report Part 4, pgs 236-250 (PDF) 821Kb
- Appendix VI, Independent Market Research Report Part 5, pgs 251-274 (PDF) 1.1Mb
- Appendix VII-VIII, Procedures for Application, List of ADAs, pgs 275-309 (PDF) 1Mb
Hektar REIT's distribution policy since 2007 is to distribute dividends on a quarterly basis. Dividend distributions are paid within 2 months of the end of the financial period. Hektar REIT makes interim quarterly distributions for the financial periods ending 31 March, 30 June and 30 September and a final year end distribution for 31 December. For the full financial year barring any unforeseen circumstances, Hektar REIT aims to distribute at least 90% of the distributable net income to its unitholders.
To review Hektar REIT's dividend track record, please click here.
Distributions are paid via cheques which are issued to each Unitholder, together with an attached tax voucher detailing the Unitholder's entitlement and the gross and net amounts paid.
Pursuant to Schedule I (Rates of Tax) of the Income Tax Act, 1967 (as amended by the Finance Act 2009 which was gazetted on 8 January 2009), the following withholding tax rates would be applicable to Unitholders:
Category of Unitholder
Withholding Tax Rate
Non-resident institutional investor
Non-resident other than company and institutional investor
Unitholder other than a resident company
For more information concerning taxation, please consult a professional tax advisor.
For the financial year ended 31 December 2009 (FY2009), the total DPU was 10.30 sen. The DPU yield based on the IPO price of RM1.05 was 9.8%. The DPU yield based on the closing price of RM1.12 for 31 December 2009 was 9.2%.
For the financial year ended 31 December 2008 (FY2008), the total DPU was 10.20 sen. FY2009 DPU exceeded FY2008 DPU by 1%.
Please ensure that you were a Unitholder at the time of the ex-dividend date. As a Unitholder at the time of the ex-dividend date, you will be entitled to receive a distribution cheque, which will be posted out on the distribution payment date. The ex-dividend and distribution payment dates are published in the 'Distribution Details' section under 'Investor Information' of this website, or in the quarterly results presentation.
As a standard practice, we request if you could allow 7 working days for postal delivery within Malaysia or 15 working days for postal delivery overseas from the distribution payment date.
If you have not received your payment by that time, we would like to request for the following details:-
1) Full Name
2) Current Address
3) CDS Account Number
4) Day Time Phone Number
5) Email address (if applicable)
You may contact us directly with the above mentioned details, using our special Online Distribution Enquiry form.
From time to time, the Manager may issue further Units as permitted under the SC Guidelines on REITs and upon such terms as determined by the Manager, in accordance with the provisions of the SCA, the SC Guidelines on REITs, the Listing Requirements and any other applicable regulatory requirements. Subject to the provisions of the SC Guidelines on REITs, the SCA and any applicable laws, the Manager shall determine the issue price for new Units on market-based principles, taking into account the best interests of the Unitholders of Hektar REIT.
The key rights of Unitholders include rights to receive distributable income attributable to Units held; to receive fund reports of Hektar REIT; to attend and vote at meetings of Unitholders; to participate in the winding up of Hektar REIT and in any increase in the value of the investments comprised in the assets of Hektar REIT in accordance with the Deed.
The Trustee, or the Manager on behalf of the Trustee, may at any time convene a meeting of Unitholders. The Manager must, within 21 days after an application is delivered to the Manager at its registered office, being an application made by not fewer than 50 Unitholders or one-tenth in number of the Unitholders, whichever is less, convene a meeting of Unitholders. The Manager may not exercise the voting rights in respect of the Units it or its nominees hold in any meeting of Unitholders, regardless of the party who requested the meeting and the matter or matters that are laid before the meeting. Any related corporation (as defined in the Companies Act 1965) of the Manager may not exercise the voting rights in respect of the Units it holds in any meeting.
Any decisions to be made by resolution of Unitholders shall be made by ordinary resolutions unless a special resolution or majority 2/3 resolution is required by applicable laws and requirements and/or the Deed.
The quorum required for a meeting of the Unitholders shall be as follows:-
a) where an ordinary resolution only is to be proposed, at least 5 persons holding or representing by proxy at least 10% of all the number of Units and carrying the right to vote at the meeting; and
b) where a special resolution or a majority 2/3 resolution is to be proposed, at least 5 persons holding or representing by proxy at least 15% of all the number of Units and carrying the right to vote at the meeting.