KUALA LUMPUR (Jan 4): AmanahRaya Real Estate Investment Trust (ARREIT) has completed the disposal of its 4-star Holiday Villa Beach Resort and Spa Langkawi with 238 rooms in Langkawi, Kedah to property developer Plenitude Bhd for RM145 million cash.

In a filing with Bursa Malaysia on Thursday, ARREIT said this follows the signing of a sale and purchase agreement with Plenitude's wholly-owned subsidiary Plenitude Gateway Sdn Bhd for the proposed disposal in June last year. Upon completion of the disposal, the REIT is poised to lock in a RM45 million gain while gearing will improve to 43.5% on proforma basis, from 45% based on its audited total asset value at end-December 2022.

In a separate statement, ARREIT said the gain will be reflected in the financial statements ending Dec 31, 2024.

The REIT is exiting what it refers to as the non-core hospitality segment as part of its shift to high-yield education assets.

It said then that proceeds from the transaction will be used for the acquisitions of education assets or to pare down the REIT’s existing debt.

The REIT is also reportedly looking to sell off the former Holiday Villa Alor Setar in Kedah, which has been left vacant since 2018, as it seeks to fully exit the hospitality business.

ARREIT units closed up 0.5 sen or 1.28% at 39.5 sen on Thursday, giving it a market capitalisation of RM226.42 million. Its unit price has fallen 31.9% over the past year.