KUALA LUMPUR (Feb 27): Following its maiden acquisition of three industrial properties in Iskandar Malaysia for RM69.3 million, AME Real Estate Investment Trust (AME REIT)’s financing headroom still remains at RM430 million.
In a statement on Monday (Feb 27), AME REIT said the financial headroom will enable the group to look into exploring future acquisitions within and outside Johor.
This follows AME REIT’s recent proposed acquisition of the properties which received unitholders approval on Monday. The company said the acquisitions will boost its total asset value by 12.8% to RM644.1 million.
AME REIT had on Dec 5, 2022 entered into three conditional sale and purchase agreements with subsidiaries of AME Elite Consortium Bhd for the sale and purchase of the properties.
All three industrial properties, which are located within AME Elite’s integrated industrial parks in Iskandar Malaysia, have existing lease arrangements for a tenure of 10 years with an option to renew for a further three to five years, said AME REIT.
The properties consist of two industrial properties in i-Park @ Indahpura in Kulai and an industrial property in i-Park @ Senai Airport City in Senai, with a combined agreed lettable area of more than 256,000 sq ft. This would increase AME REIT's agreed lettable area by 15.9% to 1.9 million sq ft from 1.6 million sq ft at present.
Chan Wai Leo, CEO of AME REIT, said the acquisitions set the company on a robust growth path alongside a strong recovery and the sustained popularity of the Iskandar Malaysia economic zone with multinational corporations (MNCs).
“The Malaysian economy’s stronger-than-expected growth in 2022, coupled with a firm government and pro-business policies, are likely to spur greater foreign- and domestic direct investment going forward. Hence, the higher demand for industrial properties amongst both MNCs and domestic firms in the country potentially creates a firm pipeline for AME REIT to increase our portfolio,” he said in the statement.
He added the acquisitions bring AME REIT’s portfolio to 37 assets with a combined value of RM644.1 million.
“AME REIT would have remaining financing headroom of more than RM430 million to explore future acquisitions, be they from AME Elite or from third-party sources within and beyond Johor, to sustain our momentum,” he added.
The acquisitions are not expected to have material effect on AME REIT’s earnings and distributable income for the financial year ending March 31, 2023 but are expected to contribute positively to its future earnings and distributable income.