Paradigm Reit offers an attractive ~7% dividend yield, supported by a high-quality retail asset portfolio. Key points include:
1. High-Quality Retail Asset Portfolio - Features prime assets like Paradigm Mall PJ, Paradigm Mall JB, and Bukit Tinggi Shopping Centre, all in top locations with strong foot traffic and near-full occupancy (97.9%–99.2%).

2. Stable Income with Growth Potential - Long-term lease with AEON (BTSC) ensures steady cash flow until 2029 and a diverse tenant mix across malls reduces dependence on any single tenant.

3. Strong Sponsor & Financial Backing - Backed by WCT Group, holding 65% ownership post-IPO and strong financial support with a RM5.0 billion MTN programme and RM845 million secured against key assets.

4. Balanced Lease Expiry Profile - Top 10 tenants contribute less than 20% of rental income per mall, minimizing concentration risk and lease expiries spread across 2027 to reduce vacancy risk.

5. Strategic Growth Outlook - Potential for rental reversion, asset enhancements, and future acquisitions, providing further growth opportunities.

Once the RTS is up and running, we can expect a new wave of growth. With more people crossing the border every day, sectors like retail, food, and tourism will thrive, and PARADIGM will be one of the big beneficiaries

Investment Note: Paradigm REIT (5338)
Paradigm REIT: A Solid 7%+ Yield Backed by Retail Strength

Paradigm REIT (KLSE: PARADIGM), listed in June 2025, has anchored its portfolio with three prominent retail assets: Paradigm Mall Johor Bahru, Paradigm Mall Petaling Jaya, and Bukit Tinggi Shopping Centre. Together, these malls were valued at a combined RM2.44 billion and continue to enjoy high occupancy, providing a stable base of recurring income. With borrowings of RM842.6 million, the REIT’s gearing ratio stands at about 33.5%, leaving ample headroom under the regulatory cap of 50%.

For the short stub period from 10 to 30 June 2025, Paradigm REIT delivered revenue of RM13.2 million and net property income of RM9.3 million. Distributable income came in at RM6.63 million, above forecast, translating into earnings of 0.41 sen per unit.

More crucially, the full-year forecast disclosed in the prospectus projects revenue of RM187.8 million, net property income of RM129.9 million, and distributable income of RM92.4 million for the period from 13 March to 31 December 2025. Based on the IPO fund size of 1.6 billion units, this equates to a forecast distribution per unit (DPU) of 5.78 sen for FY2025 (covering the nine-and-a-half-month forecast period). Annualising the figures to a full year suggests potential DPU closer to 7.2 sen, which, when compared against the IPO issue price of RM1.00, implies a forward yield of about 7.2% per annum. With the units now trading at around RM0.985, the effective yield is even more attractive, rising towards approximately 7.3%–7.4% on a forward basis.

The yield profile is competitive when benchmarked against other Malaysian retail REITs, which often distribute in the 5%–6% range. Paradigm Mall Johor Bahru stands out as the top contributor, generating nearly RM98.2 million in forecast revenue and RM66.4 million in net property income, with occupancy close to full levels. Petaling Jaya and Bukit Tinggi contribute a combined RM89.6 million in forecast revenue and RM63.6 million in net property income, both maintaining high stability.

In conclusion, Paradigm REIT offers investors a compelling entry into Malaysia’s retail REIT sector. Its forecast distributions point towards an initial yield comfortably above 7% per annum, and with units currently trading just below IPO levels, the effective yield stretches higher still. For investors seeking steady income visibility and exposure to resilient retail assets, Paradigm REIT stands out as a promising option with potential to sustain and even improve its yield profile as the portfolio matures.