KUALA LUMPUR (Sept 20): AME Real Estate Investment Trust (REIT), the REIT arm of industrial property developer AME Elite Consortium Bhd, made a modest Bursa Malaysia debut on Tuesday (Sept 20), closing three sen or 2.7% higher at RM1.16 per unit.
The counter opened at RM1.14 per unit, one sen or 0.9% higher than its initial public offering (IPO) price of RM1.13, in the morning, with the first transaction involving 1.06 million units. At RM1.16 per unit, AME REIT has a market capitalisation of RM603.2 million.
The REIT rose as much as 6.2% to an intraday high of RM1.20 per unit shortly after market open, before paring gains and hovering below the RM1.17 level for the remainder of the day.
AME REIT has an initial portfolio of 34 industrial properties and dormitories are 100%-tenanted, with multinational corporations making up more than 90% of total net lettable area of leased industrial properties.
The REIT has identified three industrial properties for potential acquisition in the next 12 months, which could potentially increase its portfolio to 37 investment properties by the third quarter of 2023, said Simon Lee, chairman and executive director of I REIT Managers Sdn Bhd, the management company of AME REIT.
"We are well positioned as an industrial REIT to benefit from incoming foreign and domestic investments into Malaysia, as they establish and/or expand their operations base in the country. We are confident of achieving stable growth in the future," he said during the listing ceremony at Bursa Malaysia on Tuesday.
Lee also said the listing gives rise to ample debt headroom of up to approximately RM240.8 million to pursue potential acquisitions, based on the prescribed limit of 50% of total asset value.
The IPO exercise entailed an offering of 254.8 million units, representing 49% of the total 520 million units in AME REIT.
The retail offering of 146.3 million units comprised 128.1 million units offered to the shareholders of AME Elite on the basis of one unit for every five ordinary shares held in AME Elite, 10.4 million units made available to the Malaysian public and 7.8 million units made available to eligible directors and employees of AME Elite and its subsidiaries.
Meanwhile, the institutional offering received approximately 4.2 times cover over the 109.5 million units made available through book-building, whereas the ballot portion of public tranche was oversubscribed by 2.46 times.
There were no proceeds raised as the IPO did not involve any issuance of new units.
Hong Leong Investment Bank Bhd was the principal adviser and sole underwriter for AME REIT's IPO exercise, and joint book-runner for the institutional offering together with RHB Investment Bank Bhd.
AME REIT aims to distribute 100% of its distributable income for the period from the listing date to March 31, 2023 and thereafter to distribute at least 90% of its distributable income to unitholders.
Distributions will be made on a quarterly basis or such other intervals as the management company may determine at its absolute discretion.