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Monday, April 21, 2008

Growing assets

AmFirst REIT eyes large properties to boost fund size

SIZEABLE PLAN: Pushpa (left) and Ooi is upbeat about the company’s growth prospects

AMFIRST Real Estate Investment Trust (REIT), the country's oldest property trust, wants to buy bigger assets of at least RM50 million to expand, its manager said.

Anthony Ooi, the acting chief executive officer of Am ARA REIT Managers Sdn Bhd, which manages the fund, said it is negotiating to buy two office buildings within Kuala Lumpur's Golden Triangle.

It is also looking at an out-of-town retail mall in Selangor, he said.

"Timing of the purchase depends on the talks and the due diligence. But there will be no small purchase, unlike some others which may buy properties in the RM7 million-RM8 million range," he told Business Times.

AmFirst REIT is the second largest in Malaysia after Starhill REIT, and it will be a drain on resources for a sizeable fund to study small assets, he said.

The size of AmFirst REIT swelled 45 per cent to RM835 million recently after it completed the purchase of all unsold units at The Summit Subang USJ, which comprises an office tower, a retail mall and a hotel.

It had only RM490 million assets when it was restructured and re-listed under the REIT guideline in December 2006. These assets are due for revaluation next year, which will likely reflect the higher asset prices in the city.

AmMerchant Bank Bhd's executive director Pushpa Rajadurai, who is also an alternate director of the REIT's manager, said the trust will continue to grow and meet its own target of RM1 billion asset size in 18 months, and RM2 billion by fiscal year 2010.

"Malaysia still has sufficient good buildings to be acquired for property trusts. We will look abroad when the opportunities come but we don't need to actively seek for overseas acquisitions," Pushpa said.

Outside KL, it is looking at Penang and Sabah for future purchases. It will also not rule out other smaller states, Ooi added.

While office space remains the core asset of AmFirst REIT, Ooi said it plans to add more retail malls, especially from suburban areas like Petaling Jaya and Subang, with good catchment areas. It will also consider suburban office space, he added.

By New Straits Times (by Chong Pooi Koon)

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