KUALA LUMPUR: AmanahRaya Real Estate Investment (AmanahRaya REIT) is planning to buy back its recently-sold Wisma AmanahRaya building in 3 or 4 years after its value is enhanced.
Its acting principal officer Noorbaizura Hermeyney said the move is one of the strategic approaches by AmanahRaya REIT to enhance the value of its assets.
"REIT is involved in property investments instead of developing properties. As part of our plan to improve the portfolio of our REIT, the building will be disposed to be developed into a higher value-accretive and more yields asset," she said after its emergency grand meeting (EGM) yesterday.
AmanahRaya REIT is disposing its Wisma AmanahRaya building to Annex Sentral Sdn Bhd for RM78 million with gains of RM10 million.
The sale and purchase of the building however is arm's length in nature as Annex is not subject to any pressure from AmanahRaya REIT, Noorbaizura said.
"Though Annex will be acting in their own interest, we have negotiated with Annex that they will come to us first when deciding to sell the property later," she said.
Irrespective of its arm's length nature, it triggered a requirement to obtain minority shareholders' approval as it is a related party transaction with Annex being a wholly-owned subsidiary of AmanahRaya Bhd.
The disposal is expected to complete by year end.
The proceeds from the disposal will be utilised to finance the acquisition of two properties in Johor worth RM50 million.
Noorbaizura said AmanahRaya REIT expects lower dividends next year after selling off the property as it constitutes 12.3 per cent of the company’s growth.
However, she added the proposed acquisition of the two properties will provide a yield above 6.5 per cent which will partially offset dividend losses resulting from the disposal.
Meanwhile, AmanahRaya REIT is mulling over a further sectoral diversification of its asset portfolio.
"The diversification will provide us the resilient performance especially at times of economic downturn," Noorbaizura said.
As at December 31 last year, the portfolio of AmanahRaya REIT consists of 14 properties with a total book value of RM1.077 billion under its portfolio arranging from hospitality, higher education, office building, and industrial to retail sectors.