Aeon injects assets into Tokyo-based REIT

KUALA LUMPUR: Aeon Co (M) Bhd entered into a sale and purchase agreement with Japan-incorporated Aeon REIT Investment Corp (J-REIT) yesterday to dispose of 18.18% of a piece of land in Mukim Pulai, Johor, in a deal worth RM20 million.

The disposal includes an 18.18% undivided share of the Aeon Taman Universiti shopping centre in Skudai, Johor.

The valuation of the land and building was RM110 million as at July 1.

In a filing with Bursa Malaysia, Aeon said the parcel of freehold land in Skudai measures 35,070 sq m and is currently used as a shopping centre, with car parks, department stores and supermarket.

“The net book value of the 18.18% undivided share of the land and the building based on the latest audited financial statements for the financial year ended Dec 31, 2012 (FY12) is RM5.08 million.

“The remaining 81.82% undivided share of the property shall be retained by the company,” said Aeon in the filing.

The disposal is conditional with some terms, including the listing of J-REIT on the Tokyo Stock Exchange.

In addition, Aeon will take a 10-year lease of the Skudai property at a monthly rental of RM117,466.

“The monthly rental shall be adjusted once every three years in line with the changes in Malaysia’s Consumer Price Index provided that such an increase shall not be more than 10% from the last monthly rent payable,” it said.

In explaining the rationale for the disposal, Aeon said the transaction allows the company to enjoy synergistic benefits with J-REIT.

The transaction is expected to give rise to an estimated gain of RM15 million for FY14, it said.

The disposal is expected to be completed within the next 12 months.

This article first appeared in The Edge Financial Daily, on October 03, 2013.