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Saturday, October 27, 2007

AmanahRaya REIT close to RM1b target

By New Straits Times

AMANAHRAYA Real Estate Investment Trust (AR-REIT) says it is close to striking its target of owning RM1 billion worth of properties by year-end, a move which requires it to raise more funds.

The second-largest REIT in Malaysia by asset value, with 13 local commercial units worth a combined RM641 million, is already in talks with potential real estate sellers in the Klang Valley.

"Hopefully, we will be able to make some announcements by this December," AR-REIT managing director Datuk Mohamed Azahari Kamil said after the property trust's unitholders meeting in Kuala Lumpur yesterday.

Mohamed Azahari did not elaborate on AR-REIT's upcoming properties, only indicating that the trust will sell more AR-REIT securities and resort to bank loans to fund the potential property deals.

Ideally, the first state-owned property trust here wants to cap its gearing level at 40 per cent, lower than 49.1 per cent it registered upon listing last February. Current gearing stands at 37.2 per cent, its circular to unit-holders showed,

AR-REIT unitholders had earlier approved its planned fund-raising and acquisition of five additional properties, on top of the existing eight.

The real estate entity is expected to raise up to RM93 million from a private placement of a maximum 100 million new securities.

Of the RM93 million, 94 per cent, or RM87.5 million, has been earmarked for the purchase of two of the five latest properties AR-REIT had earlier intended to buy.

The five multi-sectoral entities include two Selangor-based premises - Tamadam Bonded Warehouse Bhd's storing facility in Klang and higher-education provider SEG International Bhd's building in Kota Damansara.

AR-REIT plans to make its first foreign purchase, a hotel, within the first half of 2008, according to news reports.

The trust posted a net profit of RM4.3 million, or 2.36 sen a share, in the first half to June 2007, while revenue stood at RM7.6 million. As it was only listed last February, there are no comparative figures from a year ago.

Meanwhile, Mohamed Azahari said a REIT, equally-owned by AR-REIT's parent Amanah Raya Bhd (ARB) and Indonesian property firm Gapura Prima group, is due for a listing in Singapore by March 2008.

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