Boustead REIT buys plantations for RM192m

The Islamic-based Al-Hadharah Boustead Real Estate Investment Trust (REIT) is increasing its plantation size from 12,000ha to 16,000ha by acquiring the Bebar and Malakoff estates in Pahang and Penang for RM192 million.

The purchase of the two estates, aimed at increasing unitholders value, will be funded by syariah- compliant loans and issuance of new REIT units.

In a statement yesterday, it said the REIT continues to chart positive growth based on its financial performance for the six months to June 30, 2008.

The fund posted an unaudited revenue of RM36.3 million, 57 per higher than the same period last year, derived from its current eight oil palm plantations and two palm oil mills.

Out of the revenue, RM15.5 million stem from its performance-based profit sharing structure while RM20.8 million was achieved from rental income.

The fund was able to achieve an actual average palm oil price of RM3,026 per tonne against the reference price of RM1,500 per tonne in the first six months of 2008.

Due to this performance-based profit-sharing mechanism, the additional profit in excess of RM1,526 per tonne translated to a sterling gain for the fund.

As a result, its net earnings per unit for the period under review was 7.13 sen, marking an increase of 34 per cent over the same period last year.

"We have seen very strong growth over the first six months of this year, thanks to crude palm oil (CPO) prices. Unitholders are enjoying significant returns because of our winning profit-sharing structure," Boustead REIT Managers Sdn Bhd chairman Tan Sri Lodin Wok Kamaruddin said.


"The fund will maintain its prudent approach when it comes to forward sales without affecting our growth strategy" Tan Sri Lodin Wok Chairman Boustead REIT Managers Sdn Bhd

"While there may be cyclical and speculative pressures on CPO prices in the future, we are optimistic that pricing for this highly sought after commodity will remain strong. The fund will maintain its prudent approach when it comes to forward sales without affecting our growth strategy," he added.

In tandem with the fund's performance, the managers have proposed a distribution of 3.69 sen per unit in respect of the period under review, which will be paid on August 29 2008.

By New Straits Times (by Sharen Kaur)