AmanahRaya poised to have third biggest REIT

BTimes 3/9/2010

AMANAHRAYA Real Estate Investment Trust (ARREIT) (5127) expects to become the country's third biggest property trust by asset value after it completes buying three new properties this year.


It is currently the fourth biggest REIT with assets of RM1 billion, after Sunway REIT, CapitaMall REIT and the YTL group's Starhill REIT.


ARREIT plans to grow assets by 80 per cent to RM1.8 billion by next year, its group managing director Datuk Ahmad Rodzi Pawanteh said.


Yesterday, the trust signed a deal to buy three properties owned by Selangor State Development Corp (PKNS). "The three new properties, namely Menara PKNS, Kompleks PKNS and Shah Alam Convention Centre Mall, will help strengthen our asset base," Ahmad Rodzi said. The indicative purchase price of the properties, valued at RM270 million, will be satisfied with a combination of new units and cash.


PKNS will get 122.7 million new units priced at 88 sen each and RM162 million in cash. In a separate deal, PKNS will also buy 70 million units at 95 sen each from Kumpulan Wang Bersama (KWB), a fund managed by AmanahRaya."


This is the fourth injection for ARREIT and will be our final acquisition exercise this year," Ahmad Rodzi told reporters after the signing of the sale and purchase and share agreements in Kuala Lumpur yesterday.


Also present was PKNS general manager Othman Omar.


Upon completion of the deals, PKNS will emerge as the second largest substantial unitholder of ARREIT, after KWB. "PKNS will own approximately 30 per cent of ARREIT, while AmanahRaya's ownership will be 33 per cent," Ahmad Rodzi said. Both parties also entered into lease agreements under which PKNS will lease the properties from ARREIT for 12 years.


Othman said PKNS was very excited over the exercise. "It is a win-win transaction for all parties and will enable us to unlock the true market value of the three properties," he said.


It was reported earlier that PKNS had identified 16 high-profile projects worth RM10 billion for future injection into its REIT.