Atrium REIT spends RM15.4m to upgrade Atrium Shah Alam 2

KUALA LUMPUR (Jan 8): Atrium Real Estate Investment Trust (Atrium REIT) is spending RM15.4 million, excluding goods and services tax (GST), to undertake an asset enhancement initiative (AEI) on Atrium Shah Alam 2.

In a filing with Bursa Malaysia today, Atrium REIT said the cost of the AEI will be financed via bank borrowings and internal funds.

The AEI mainly involves the upgrading and refurbishment of the whole warehouse floor slab and the whole warehouse roof; the replacement of the lighting system for the whole warehouse; the replacement of the rain water goods; external wall and facade repainting; and sheet piling works at the rear boundary of the property, it said.

"The sheet piling works are necessary to prevent the soil/earth beneath the warehouse floor slab to be drawn out gradually causing the said floor slab to undulate and the rear driveway to settle," it added.

According to the REIT manager, the AEI is targeted to commence this month and completed by October 2016 in phases.

Atrium REIT said its earnings are expected to be affected during the period of the AEI.

"Upon completion of the AEI, the property is expected to contribute positively to the earnings of Atrium REIT and also enhances the commercial value of the property. The major AEI cost will be capitalised as part of the cost of the property," it said.

Atrium REIT also noted its gearing ratio will increase to 30.45% from 25.06% based on the total assets as at Sept 30, 2015, which is still below the gearing limit of 50% prescribed under the guideline on REIT issued by the Securities Commission Malaysia.

Shares in Atrium closed unchanged at RM1.10, giving it a market capitalisation of RM133.98 million. -- theedgeproperty.com