PETALING JAYA: AME Real Estate Investment Trust
(AME-REIT) has proposed its maiden acquisitions of three industrial properties in Iskandar Malaysia for RM69.3mil from AME Elite Consortium Bhd.
AME-REIT’s proforma total asset value is expected to be raised by 12.8% to about RM644.1mil with the cash purchase, the Islamic REIT manager, I-REIT Managers Sdn Bhd said in an exchange filing.
With a combined agreed lettable area (ALA) of more than 256,000 sq ft, the three assets entails two industrial properties in i-Park @ Indahpura in Kulai and an industrial property in i-Park @ Senai Airport City in Senai, both in Johor.
“The proposed acquisitions would increase AME-REIT’s ALA by 15.9% to 1.9 million sq ft from 1.6 million sq ft at present.
“All three industrial properties have existing lease arrangements for a tenure of 10 years with an option to renew for a further three to five years, and are expected to provide AME-REIT with stable and sustainable income over the tenure of the leases,” said AME-REIT in a statement yesterday.
AME-REIT made it debut on the main market of Bursa Malaysia in September 2022. During the listing ceremony, AME-REIT had announced its intent to undertake potential acquisition of the aforementioned properties that were being developed by AME Elite.
I-REIT Managers Sdn Bhd chief executive officer and executive director Chan Wai Leo said AME-REIT still has a large financing headroom to pursue potential acquisitions in the central and northern regions of Peninsular Malaysia in addition to Johor in the near future.
“Our maiden acquisitions post-listing marks a commendable start for AME-REIT’s growth journey. These newly minted industrial properties are located in prime locations with excellent build quality.
“The properties will be fully occupied by quality customers with long leases. Enhancing our proforma total asset value to more than RM640mil within a few months of our flotation exercise denotes our desire to expand the fund,” he said.
AME-REIT will retain a premium portfolio of 37 properties containing freehold industrial properties and worker dormitories with steady tenancies upon the completion of the proposed acquisitions.
Assuming the proposed acquisitions are fully financed via Islamic financing facilities, AME-REIT’s gearing ratio is estimated to increase from 0.06 times as at Sept 30, 2022 to 0.16 times.
AME-REIT is permitted to increase its gearing to 0.5 times of total asset value for future acquisitions.
AME-REIT last traded at RM1.18 a unit at market close yesterday.
