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UOA Asset Management buys 16 office suites for RM14.56m

KUALA LUMPUR: UOA REIT’s management company branch UOA Asset Management Sdn Bhd is buying 16 office suites in Wisma UOA II in Jalan Pinang in the Kuala Lumpur City Centre here from Instant Yield Sdn Bhd.

The freehold units, measuring 23,864 sq ft in total is located on level 17 of the building and has a cash consideration of RM14.56 million, representing a 1.7% discount from the market value of RM14.80 million as appraised by PA International Property Consultants (KL) Sdn Bhd.

“The key objective for UOA REIT is to provide the unit holders with stable distribution per unit with the potential for sustainable long-term growth of such distributions and the net asset value per unit,” said UOA REIT in a statement to Bursa Malaysia on Dec 21, 2009.

“Given the prime location and high tenancy of UOA II, the manager (UOA Asset Management) is of the view that the acquisition meets both the stated investment objectives of UOA REIT and the manager.”

The acquisition will be funded by new and existing unutilized bank borrowings. “A new facility of RM5 million in bank borrowings is to be procured to part finance the acquisition,” said UOA REIT.

The suites, which are approximately 11 years old, see 12 of the 16 units occupied as at Oct 22, 2009. However, UOA REIT is confident that all the units will be rented out in view of the “strong occupancy rate of Wisma UOA II”.

According to UOA REIT, the 12 units are expected to generate total rental revenue per annum of RM729,000. The acquisition is expected to be completed by the first quarter of 2010 (1Q10).
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