KUALA LUMPUR (Aug 29): AmanahRaya Real Estate Investment Trust (REIT) (KL:ARREIT), which is currently pursuing educational assets, has proposed to acquire a corner six-storey detached commercial building in Shah Alam for RM31.4 million.
The acquisition will be funded by its existing and future bank financing, said AmanahRaya REIT in a bourse filing on Thursday.
The REIT's trustee-manager, Pacific Trustees Bhd, is buying the asset, with a net lettable area of 4,465 square metres, from Stuttgart Holdings Sdn Bhd.
The property is currently leased to Tinta Pendidikan Sdn Bhd for use as a private school. Under the novation of the existing proposed tenancy agreement, the term of the lease will be until Dec 31, 2040, with a triple net rent of RM160,000 per month and subject to pre-agreed rent revision every three years.
AmanahRaya REIT said the acquisition, which is expected to be completed by the first quarter of 2025, will be accretive to its distributable income and adds to the portfolio of properties that will benefit the fund in the long term.
Managing director Tunku Rozita Abdul Malek previously said in April that the REIT is focusing primarily on acquiring educational assets, wellness facilities and industrial properties, particularly in logistics.
This after the REIT made a decision to fully divest from the hospitality sector as part of ongoing initiatives to optimise its portfolio by acquiring high-yielding assets and divest non-core assets.
In January, AmanahRaya REIT completed the disposal of its four-star, 238-room Holiday Villa Beach Resort and Spa Langkawi to property developer Plenitude Bhd for RM145 million.
The REIT is also reportedly looking to sell its remaining asset under the hospitality segment, the former Holiday Villa Alor Setar in Kedah, which has been left vacant since 2018, as it seeks to fully exit the hospitality business.
As at March 31, 2024, the REIT's investment properties, comprising 11 properties across the office, education, industrial, retail and hospitality sectors, were valued at RM1.27 billion.
Units of AmanahRaya REIT closed up 0.5 sen or 1.64% at 31 sen, giving it a market capitalisation of RM174.83 million. The REIT's prices have declined over 30% in the past year.