Am ARA REIT eyes RM500m Klang Valley properties

Am ARA REIT Managers Sdn Bhd, the manager of AmFIRST Real Estate Investment Trust (AmFIRST REIT), plans to buy properties worth RM500 million in the Klang Valley, following the implementation
of the rights issue for the trust in July this year, said its chief executive officer, Lim Yoon Peng.

Unitholders of AmFIRST REIT today unanimously approved the proposed renounceable rights issue and a proposed increase in fund size at the unitholders' meeting here today.

Lim said based on an illustrative rights issue price of 85 sen per unit, the proposed rights issue is expected to raise gross proceeds of about RM218.79 million.

Of that amount, a total of RM214.74 million will be utilised to pare down the fund's existing borrowings which stood at RM550 million as at its financial year (FY) ended March 31, 2012.

"This will reduce the leverage ratio and provide the trust with sufficient headroom to gear up in future and respond immediately to potential yield accretive and strategic acquisitions," Lim told a press conference.

He said he is looking at office buildings with high capital appreciation potential at strategic locations in the Klang Valley.

"We will focus on commercial offices which are at full occupancy or close to it," he added.

He also expects AmFIRST REIT's net income for the current year to exceed the RM52.19 million recorded for the FY ended March 31, 2012.

"Commercial offices Prima 9 and Prima 10 located in Cyberjaya, and acquired late last year, have accretive yields. Contribution from these properties were recognised only into the four months of the last financial year.

"Going forward, these properties will contribute to the whole of the current financial year," Lim said.

For the financial year ended March 31, 2012, AmFIRST REIT recorded an after-tax realised profit of RM39.9 million, up 10.6 per cent from the RM36 million in the preceding year.

Its asset under management (AUM)registered growth of 15.2 per cent to RM1.18 billion, primarily via new acquisitions of Prima 9 and Prima 10, while net asset value rose from 141.25 sen to 144 sen per unit.

The trust has proposed a final income distribution of 4.83 sen per unit for the six-month period from October 1, 2011 to March 31, 2012.

By Bernama