ARREIT assets set to hit RM1.8bil next year

03 September 2010 , By The Star

It plans more acquisitions to increase its portfolio

Amanah Raya Real Estate Investment Trust (ARREIT), Malaysia’s fourth largest real estate investment trust (REIT), expects its assets to grow to RM1.8bil next year with its planned acquisition of more assets.

Amanah Raya Bhd (ARB) group managing director Datuk Ahmad Rodzi Pawanteh said ARREIT, which currently has an asset portfolio of RM1bil, would see its asset value expand to RM1.3bil with the injection of three properties owned by the Selangor State Development Corp (PKNS).

“This will be our fourth asset injection since our inception in 2007 with just RM340mil worth of assets, and will be the final acquisition for this year,” he told reporters yesterday after the signing of the REIT agreements between ARB and PKNS.

Rodzi said the three PKNS properties – Menara PKNS, Kompleks PKNS and SACC Mall – were acquired for RM270mil and would be satisfied via a combination of cash and consideration units to be issued to PKNS.

He said upon completion of the sale and purchase agreement and share agreement, PKNS was expected to own about 30% of ARREIT, whils ARB would own 33% of the REIT.

Rodzi said that after the acquisition, ARREIT was expected to be the country’s third largest REIT in terms of asset value, overtaking YTL REIT, and behind Sunway REIT and CapitaMalls MalaysiaTrust.

Both parties also entered into separate lease agreements for each of the three properties, with PKNS leasing the properties from ARREIT for 12 years. This would ensure 100% occupancy of the properties and provide immediate rental income to ARREIT.

Meanwhile, PKNS general manager Othman Omar said: “PKNS will be able to unlock the market value of the three properties to be injected into ARREIT and, at the same time, it will also gain exposure to ARREIT’s existing portfolio of 15 property assets, via our future ownership of a 30% stake in ARREIT.”

PKNS would also earn recurrent income through its investment in ARREIT, which is a quality Bursa Malaysia-listed REIT and strong growth potential.