KUALA LUMPUR: AME Real Estate Investment Trust (AME REIT) has proposed to acquire three industrial properties in Iskandar Malaysia for RM69.3 million.
The company said the acquisitions would boost its total asset value by 12.8 per cent to approximately RM644.1 million.
The company noted that RHB Trustees Bhd has entered into three conditional sales and purchase agreements with subsidiaries of AME REIT's sponsor, AME Elite Consortium Bhd, for the sale and purchase of the three properties, respectively.
The three properties consist of two industrial properties in i-Park @ Indahpura in Kulai and an industrial property in i-Park @ Senai Airport City (SAC) in Senai, with a combined agreed lettable area (ALA) of more than 256,000 square feet.
The acquisitions would increase AME REIT's ALA by 15.9 per cent to approximately 1.9 million sq ft from 1.6 million sq ft.
I REIT Managers Sdn Bhd executive officer and executive director Chan Wai Leo said the acquisition marked a commendable start for AME REIT's growth journey.
"These newly minted industrial properties are located in prime locations with excellent build quality.
"In addition, upon acquisition completion, the properties will be fully occupied by quality customers with long leases.
"Enhancing our proforma total asset value to more than RM640 million within a few months of our flotation exercise denotes our desire to expand the fund.
"AME REIT will still have a large financing headroom to pursue potential acquisitions in the central and northern regions of Peninsular Malaysia in addition to Johor in the near future," he said.
All three industrial properties have lease arrangements for ten years with an option to renew for three to five years.
Two of the industrial properties commenced leases on October 5, 2022, with their respective lessees, namely HID Global Sdn Bhd (Plot 15 Indahpura) and SGS (Malaysia) Sdn Bhd (Plot 43 SAC).
The third industrial property to be leased to HQPack Sdn Bhd on Plot 16 Indahpura is currently under construction. The certificate of completion and compliance is expected to be issued by the third quarter of 2023.
Assuming the acquisitions are fully financed via Islamic financing facilities, AME REIT's gearing ratio is estimated to increase from 0.06 times as of September 30, 2022, to 0.16 times.
AME REIT can increase its gearing to 0.5 times of total asset value for future acquisitions.
"We are determined to provide our unitholders with regular, stable, and growing income distribution.
"These three industrial properties will be yield accretive and provide reliable recurring income to AME REIT over the long term," added Chan.