AmFirst REIT moves to shed old perception

AMFIRST Real Estate Investment Trust (REIT), the country's oldest property trust, is working hard to shed a past perception when it comes to performance.

Previously known as the AmFirst Property Trust, the fund was the first to go public on the local bourse 18 years ago as part of the government's plan to kick-start the industry. Performance of the sector was generally viewed as lacklustre as proper legislation was lacking before to spur growth.

"It is not that the market perception on AmFirst was bad. To put it in perspective, it was listed back then to answer to the government's call to set up property trusts. The fund was started to include AmBank's own buildings," AmMerchant Bank Bhd's executive director Pushpa Rajadurai said in an interview with Business Times.


PUSHPA: Since ARA came in, our asset size has increased

Since then, there was no change in the regulations that govern property trust, until 2005. And AmFirst had almost immediately taken steps to look at revamping the old property trust according to the new REIT guidelines. It remains the only one of three old property trusts that have been rebranded and re-listed on Bursa Malaysia.

"We know that in REIT, it is good to bring in an independent property manager. ARA Management has the expertise in this area and that's why we've tied up with them," Pushpa pointed out.

Singapore-based ARA Asset Management Ltd, an affiliate of Hong Kong's real estate giant Cheung Kong Group, was roped in to own a 12.5 per cent share of AmFirst REIT. It also owns 30 per cent of the trust manager, Am ARA REIT Managers Sdn Bhd.

"The change has already been reflected in our strategy. Since ARA came in, our asset size has increased and the dividends per unit were boosted," she said.

AmFirst's asset size has swelled to RM835 million recently after it bought all the unsold units of The Summit Subang USJ, which comprises an office tower, a retail mall and a hotel.

The purchase boosted its dividends by two sen per unit for the financial year to March 2009, bringing the total forecast distributions to 9.3 sen gross per unit.

Michael Lim, a director of ARA Management, said AmFirst will spend at least RM6.5 million this year to upgrade three buildings - Menara Ambank, Menara Merais, and AmBank Group Leadership Centre.

By New Straits Times (by Chong Pooi)