AmanahRaya REIT eyes acquisitions worth RM50m to RM350m

KUALA LUMPUR: The manager of AmanahRaya Real Estate Investment Trust (ARREIT) is eyeing potential acquisitions worth RM50 million to RM350 million to expand its portfolio to RM1.5 billion over the next three years from RM1.01 billion currently.

AmanahRaya-REIT Managers Sdn Bhd is evaluating a number of potential acquisitions for further consideration, with a focus on three main sectors — retail, office and industry.

It will continue to restructure as well as to add to its portfolio, it said in a statement yesterday. “This is expected to be accomplished through strategic partnerships and diversification of strategy.”

Nevertheless, the REIT manager pointed out that the challenge will be acquiring suitable properties that are able to improve ARREIT’s dividend yield over the long term.

In August 2013, the REIT manager issued a letter of offer to acquire an office building in Shah Alam, Selangor for RM30 million. The parties are still negotiating the acquisition terms.

ARREIT currently has 15 properties in its portfolio — five office complexes, two hotels, two institutions of higher learning, five industrial buildings and a retail complex. The properties are located in Langkawi, Kedah, and in the Klang Valley in locations such as Subang Jaya, Damansara Heights, Petaling Jaya, Shah Alam and Kuala Lumpur.

“This will provide investors exposure to a diverse geographical and sectorial portfolio that will cushion the impact of specific adversity in any one sector or locality,” the REIT manager said.

For its financial year 2013 ended Dec 31 (FY13), ARREIT posted a profit before tax (PBT) of RM42.3 million, compared with a PBT of RM43.4 million in FY12, while revenue stood at RM67 million compared with RM66.9 million previously. A dividend of 7.26 sen per share has been proposed for FY13, compared with 7.45 sen in FY12.

“The decrease is mainly due to the change in fair value of one of the investment properties and impairment made on its trade receivables,” the REIT manager said.

It also noted that the total assets of ARREIT were slightly reduced to RM1.01 billion from RM1.05 billion in 2012. This was mainly due to a reduction in security deposits, distribution payment for the third quarter of 2013, as well as the change in fair value of one of its properties.

This article first appeared in The Edge Financial Daily, on April 22, 2014.


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