AmanahRaya REIT is second largest in Malaysia

By The Star

KUALA LUMPUR: AmanahRaya real estate investment trust (AR-REIT) has become Malaysia’s second largest REIT in terms of asset size at about RM649mil, following the injection of five new properties.

“The total of 13 properties we have now would give a net property yield of 7.4% to 7.5%,” AmanahRaya-JMF Asset Management Sdn Bhd (AJMF) managing director Datuk Mohamed Azahari Kamil said at a press conference yesterday.

AmanahRaya-JMF is the manager of AR-REIT.

The addition of the five new properties worth RM308.67mil would provide unitholders stable distribution and growth in the net asset value per unit of AR-REIT, he said.

Datuk Mohamed Azahari Kamil

AR-REIT has a diversified portfolio mix of education (31%), industrial (29%), commercial (27%) and hospitality (7%) assets, he said, noting that AR-REIT came second after Starhill REIT in terms of asset size, with Starhill REIT having the largest asset size of over RM1bil in Malaysia.

Azahari said that AR-REIT emphasised “good quality property with strong recurring income”, adding that its additional five assets were public listed companies that provided stable distribution to unitholders.

“We are focusing on Malaysian property now, given the strong growth in local property development and in the view of the Iskandar Development Region project,” he said.

Azahari said the attractive yield in Malaysia would offset the country’s high withholding tax, adding that 70% of its proposed private placement of up 100 million units in AR-REIT was allocated to foreign investors.

Deputy chairman Kamal Abdullah Al-Yafii said the proposed placement, which was approved by its unitholders at the company EGM yesterday, would be used to finance the proposed acquisitions and improve AR-REIT's trading liquidity.

The proposed placement would be 73.6% funded by equity and the remainder by debt, he added.

He said AR-REIT hoped to reduce its gearing to 36.9% after the proposed placement from 46.3% currently and would stand at 37.2% after the proposed acquisition of the five assets. The exercise is expected to be completed by year-end.

AR-REIT would also acquire one to two commercial projects in the Klang Valley and the city centre, he added.

The five new properties are the Tamadam bonded warehouse in Port Klang, the Silverbird factory in Shah Alam, AIC Corp Bhd’s factory in Shah Alam, Segi College in Kota Damansara and Naza warehouse in Gurun.