KUALA LUMPUR (Nov 25): AME Elite Consortium Bhd is planning to list RM557 million worth of industrial and industrial-related real estate assets via its upcoming real estate investment trust, AME REIT.

In a statement, the group said the initial investment portfolio will comprise a total of 34 industrial buildings and workers’ dormitories located in or near its managed industrial parks, namely i-Park @ Senai Airport City, i-Park @ Indahpura, and i-Park @ SiLC.

These assets are currently held by its subsidiaries.

The identified assets currently have ongoing tenancy agreements with AME’s domestic and foreign clients with tenancy periods ranging from two to 12 years.

AME group managing director Kelvin Lee Chai said the REIT will unlock the significant value of the group’s investment properties, adding that the funds raised will contribute to the future growth of the group.

“We are optimistic of the immediate outlook, backed by increasing interest in our i-Parks. During the border closures, we attended to an increasing number of enquiries virtually. Now with the proposed reopening of international borders on  Jan 1, 2022, we are optimistic of seeing a more rapid pace of sales conversion.

“The boost in foreign investors setting up in i-Park will continue to support the already strong interest from domestic investors,” Lee said.

AME is proposing to issue 520 million undivided interest (units) in AME REIT and RM37 million cash, to be funded via Islamic financing, as consideration for the transfer of assets.

Of the total issuance, 254.8 million units will be offered via the initial public offering (IPO). The group said the offer issuance will consist of up to 130 million units to AME shareholders, 10.4 million units to the Malaysian public, and 7.8 million units to eligible employees and directors of AME and subsidiaries.

Meanwhile, it said at least 106.6 million units will be offered to Bumiputera investors approved by the Ministry of International Trade and Industry, as well as institutional investors and selected investors.

Upon completion of the offering, which is expected in the second quarter of 2022, AME will be the controlling unitholder of AME REIT, holding at least 51% of the total issued units.

AME expects to raise RM254.8 million from the IPO, based on an illustrative offer price of RM1 per unit, of which RM90 million will be used to repay borrowings, RM4.3 million for expenses relating to establishing the REIT, and the balance RM160.5 million for future industrial property development and investment projects including land acquisitions and joint venture.

Hong Leong Investment Bank Bhd is the principal adviser, bookrunner and managing underwriter for the proposed REIT establishment and listing.

AME's share price closed unchanged at RM1.85, giving the group a market capitalisation of RM1.19 billion.