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Thursday, September 2, 2010

AmanahRaya REIT assets to grow 40pc

Malaysia's fourth largest Real Estate Investment Trust (REIT), Amanah Raya Real Estate Investment Trust (ARREIT), expects its assets to grow 40 per cent to RM1.8 billion next year from RM1 billion currently.

Amanah Raya Bhd (ARB) group managing director Datuk Ahamd Rodzi Pawanteh said this year it would increase the total asset value to RM1.3 billion, with the injection of three properties owned by the Selangor State Development Corporation (PKNS).

"This will be our fourth injection and the final acquisition for this year since our inception with RM340 million in 2007," he told reporters at the signing ceremony of REIT agreements between Amanah Raya Bhd and PKNS today.

Ahmad Rodzi said the total acquisition price for the properties, Menara PKNS, Kompleks PKNS and SACC Mall, was RM270 million, to be satisfied via a combination of consideration units to PKNS and cash.

Upon completion of the Sales and Purchase Agreement (SPA) and Share Agreement, PKNS is expected to own approximately 30 per cent of ARREIT, whilst ARB’s ownership will be approximately 33 per cent, he explained.

He said that in respect of the Malaysian REITS market share, ARREIT expects to be the third largest in terms of REIT's property value after the completion of the exercise.

"We are going to be number three, behind Sunway REIT and Capital Mall REIT," said Ahmad Rodzi.

ARREIT was the first government-linked company REIT listed on Bursa Malaysia in February 2007.

Asked if ARREIT was looking at venturing into the overseas market, he said, it would only be possible when it had a sufficient REIT's asset base.

In conjunction with the property acquisition, both parties also entered into separate lease agreements for each of the three properties, whereby PKNS would lease the properties from ARREIT for a period of 12 years.

This will ensure 100 per cent occupancy of the properties and provide immediate rental income to ARREIT, upon completion of the acquisition exercise.

Meanwhile, PKNS general manager Othman Omar said the organisation was very excited over the exercise.

"We believe is a win-win transaction for all parties, underpinned by mutually beneficial commercial objectives," he added.

PKNS, he said, would be able to unlock the market value of the three properties to be injected into ARREIT.

"At the same time, it will also gain additional exposure to ARREIT’s existing portfolio of 15 property assets, via our future ownership of approximately 30 per cent of ARREIT," Othman said.

He also highlighted that PKNS would earn recurrent income from its investment in ARREIT, which it viewed as a high-quality Bursa Malaysia-listed real estate investment trust, with strong growth potential.

By Bernama

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