KJTS Adopts Asset-Light Strategy Through Joint Venture for Retail Mall Cooling Projects

KUALA LUMPUR (May 8): KJTS Group Bhd has signed an agreement allowing its joint venture company, Lestari Cooling Energy Sdn Bhd, to take over the asset ownership and capital investment responsibilities for a long-term retail mall cooling infrastructure project involving eight malls.

What I learned from this move is that KJTS is strategically shifting towards a more asset-light business model to preserve capital, improve financial flexibility, and position itself for future expansion opportunities in the energy infrastructure sector.

Under the revised arrangement, Lestari Cooling Energy will assume ownership of the project assets and undertake the capital expenditure commitments, while KJTS will focus on its core operational expertise, including retrofit works, chilled water supply, and operations-and-maintenance services for the malls.

According to the company, the restructuring helps reduce upfront capital commitments and strengthens its balance sheet, enabling the group to pursue additional projects using a similar business structure in the future.

One key takeaway is that KJTS recognises the importance of conserving cash and maintaining stronger credit capacity as more opportunities emerge within the cooling and energy infrastructure segment. By separating asset ownership from operations, the company can potentially scale faster without taking on excessive capital burdens.

I also learned that Lestari Cooling Energy itself represents a strategic partnership involving both institutional and international investors. KJTS holds a 10% stake in the joint venture, while Malaysia’s state-owned Retirement Funds Inc owns 30%, and American investment firm Stonepeak controls the remaining 60%.

The joint venture was established to develop district cooling and electricity distribution assets in Malaysia, reflecting growing investor interest in sustainable infrastructure and energy-efficient building systems.

The original contract was secured by KJTS last year from KIP Real Estate Investment Trust for works involving seven malls, requiring capital expenditure of approximately RM25.27 million. The contract scope was later expanded to cover eight malls in October 2025.

So far, retrofit works have already been completed for five malls, while another mall is targeted for completion between May and July this year. Under the agreement, Lestari Cooling will pay approximately RM19 million for retrofit works covering six KIPMall sites.

Meanwhile, KJTS will continue to bear retrofit costs of around RM4 million for the remaining two malls under the revised structure.

Another important point I learned is the long-term recurring income nature of the business. The operations-and-maintenance services together with chilled water supply agreements for all eight malls are expected to continue until July 2046, providing KJTS with a stable and predictable revenue stream over the long term.

Overall, the restructuring highlights how companies in the infrastructure and utilities sector are increasingly adopting partnership-based financing models to support expansion while minimising balance sheet pressure. For KJTS, this approach may improve scalability and create stronger opportunities for growth in Malaysia’s evolving energy-efficient building ecosystem.