AmREIT to increase assets under management by 45%

AmREIT is confident of improving the performance of The Summit retail mall to attract more shoppers and provide them with a satisfying shopping-cum-lifestyle experience

PETALING JAYA: Am ARA REIT Managers Sdn Bhd (AmREIT), the manager of AmFIRST Real Estate Investment Trust (AmFIRST), increased the assets under management by 45% to RM835mil after acquiring all the developer’s units at The Summit Subang USJ.

Director Cheah Tek Kuang said on Monday he was confident of improving the performance of The Summit retail mall to attract more shoppers and provide them with a satisfying shopping-cum-lifestyle experience.

The purchase of the unsold units was the last stage of AmREIT's acquisition of the property, which comprises an office tower, a retail mall, a 323-room hotel and 2,125 car park bays for RM260mil.

Cheah said in a statement the acquisition marked another milestone for AmFIRST after the recent completion of its purchase of Kelana Brem Towers in Kelana Jaya in June last year.

With this acquisition, AmFIRST had executed two sizeable acquisitions with asset values totalling RM350mil within 15 months of listing, he said, adding this was a significant 70% growth from the initial listing portfolio.

“AmFIRST will continue to look for acquisition opportunities to maximise shareholders’ value. We are looking to achieve sustainable long term growth in total returns (in terms of income distribution and capital growth) of AmFIRST REIT units,” he added.

The acquisition was structured with a guaranteed net property income yield on a stepped-up basis over four years for the retail, office and car park. The hotel would be leased back to the vendor for five years and an additional five years on a stepped-up basis also.

The structure would offer unit holders yield protection via the guaranteed minimum net income and also upside potential via the hotel profit-sharing arrangement, the statement said.

The acquisition would boost the distribution per unit (DPU) by an approximately two sen up to the year ending March 31, 2009.

By The Star

Menara Stanchart up for sale?

SINGAPORE's real estate investment arm plans to sell Menara Standard Chartered at Jalan Sultan Ismail here for about RM300 million, seven years after it bought the property, sources said.

The Government of Singapore Investment Corp Real Estate (GIC RE) is believed to have approached several local property agents for the possible sale.

"They are looking for a yield of about six per cent which works out to about RM950 per sq ft. They should not settle for any less than RM900 per sq ft for the building and in that location," a property agent said.

Based on a nett lettable area of 321,000 sq ft, the building could be sold for between RM289 million and RM305 million.

GIC RE vice-president for administration and corporate affairs, Greg Baptist, declined to comment when contacted.

According to GIC RE's website, it bought Menara Shahzan Insas through its affiliate Reco City Sdn Bhd in November 2001 for RM135 million.

Built in the mid-1980s, Menara Shahzan Insas is a 42-storey office tower with a total gross floor area of 46,700 sq m.

The building was later renamed Menara Standard Chartered in July 2004 after Standard Chartered Bank relocated its corporate headquarters there.

The website also said the building required extensive renovation due to its age and condition at the time of acquisition.

Once renovation was completed, GIC RE repositioned Menara Standard Chartered as a premium office building, attracting class A office rentals and international tenants like Standard Chartered Bank, California Fitness and Servcorp.

GIC RE is one of three business units under GIC, one of two of Singapore's investment arms. Temasek is the other arm that is more well known among investors. Together, they manage Singapore's foreign reserves.

GIC RE's website states that its current assets in Malaysia include holdings in the Sunway Pyramid Mall, Sunway Hotels and Resorts and a stake in the City Square shopping mall in Johor Baru.

By New Straits Times (by Vasantha Ganesan)

Affin, Mutiara Goodyear in Penang housing pact

Affin Islamic Bank CEO Kamarul Ariffin Mohd Jamil (left) exchanging documents with Hamidon Abdullah. Looking on is Affin Islamic Bank chairman Jen (R) Tan Sri Datuk Seri Ismail Omar

KUALA LUMPUR: Affin Islamic Bank Bhd and Mutiara Goodyear Development Bhd have entered into a musharakah (joint venture) financing arrangement for a high-end residential development in Penang with a gross development value of RM180mil.

Under the joint venture, Mutiara Goodyear would be responsible for the construction and sales of the development while Affin Islamic Bank would provide the required financing facilities.

Affin Islamic Bank chief executive officer Kamarul Ariffin Mohd Jamil said the musharakah was established via a registered special purpose vehicle called Affin-i Goodyear Sdn Bhd in which Affin Islamic Bank and Jurus Positif Sdn Bhd, a wholly owned subsidiary of Mutiara Goodyear, are joint partners.

“The financing arrangement is the first in the country to feature a combination of hybrid Islamic financing products in a partnership where profit and losses are shared equally. This is truly advantageous in times of economic uncertainty,” he said at the signing ceremony yesterday.

Mutiara Goodyear executive chairman Hamidon Abdullah said the company was in the midst of obtaining Penang state government approval for the development on an 8.8 acres in Bukit Gambir.

He did not anticipate any problems in getting the green light, adding that the project should take three years to complete.

“We are targeting the affluent market and are confident that this development would enjoy a high take-up rate, buoyed by the dynamic Penang property market and the influx of foreigners residing under the Malaysia MySecond Home Programme,” he said.

The property developer, which has an undeveloped land bank of about 800 acres in Penang and the Klang Valley, has lined up a few launches.

“We are planning commercial developments, comprising a shopping podium and office blocks at PJS 11 in Sunway; office suites at Prima Avenue, Kelana Jaya; and high-end bungalows at Nadayu Melawati, Ampang,” Hamidon said but did not elaborate.

Affin Islamic Bank, which celebrated its second anniversary yesterday, has targeted a 10% growth in pre-tax profit this year from RM58mil last year.

The bank, which hopes to increase its disbursement of loans by 15% this year from the total of RM1.7bil in 2007, also plans to expand to Indonesia in the near future.

“Islamic banking penetration is very low as it comprises only about 1% of total banking assets in Indonesia,” he said, adding that the bank also hoped to springboard to China as well as the Hong Kong market via its 25% stakeholder, Hong Kong-based Bank of East Asia Ltd.

By The Star (by Laalitha Hunt)