KUALA LUMPUR (Sept 4): AmREIT Managers Sdn Bhd (AmREIT), the manager of AmFirst Real Estate Investment Trust (AmFirst REIT) (KL:AMFIRST) on Friday announced that it has issued a circular to unitholders in relation to the proposed disposal of Menara AmBank to AmBank (M) Bhd for a total cash consideration of RM331 million.
In a statement on Friday, AmFIRST REIT said it will convene an extraordinary general meeting (EGM) to seek unitholders approval for the proposal.
The EGM will be held on Sept 21, 2026 at 11am or immediately following the conclusion of AmFIRST REIT's 14th Annual General Meeting to be held on the same day.
It said the proposed disposal forms part of AmFIRST REIT's ongoing portfolio rationalisation and capital recycling strategy aimed at optimising asset performance, enhancing financial flexibility and positioning AmFIRST REIT for sustainable long-term growth.
“The proposed disposal is expected to generate annual interest cost savings through the settlement of secured borrowings and partial repayment of outstanding financing facilities thereby eliminating the negative yield spread and delivering an accretive financial impact to AmFIRST REIT,” it said.
AmREIT Managers Sdn Bhd chief executive officer and AmFIRST REIT manager Chong Hong Chuon believes the proposed transaction presents a compelling opportunity to unlock value from a mature and lower-yielding asset while strengthening AmFIRST REIT's balance sheet and enhancing financial flexibility.
“Upon completion of the disposal, the proceeds will be utilised primarily for debt reduction, resulting in substantial financing cost savings and a significant reduction in gearing.
“This will strengthen AmFIRST REIT’s financial position and enhanced its flexibility to pursue opportunities that support its portfolio repositioning and diversification strategy towards higher-yielding assets with more resilient income streams, thereby enhancing earnings sustainability and supporting long-term value creation for unitholders,” he said.
Menara AmBank, a 46-storey purpose-built office tower located within Kuala Lumpur's Golden Triangle, has been part of AmFIRST REIT's portfolio since 2006.
While the asset has continued to contribute income to the REIT, its net property income yield has remained below AmFIRST REIT's average borrowing cost in recent years due to prolonged low occupancy and subdued rental rates, reflecting the challenges facing Kuala Lumpur's office market, including structural oversupply and intensified competition from newer office developments.
Based on the pro forma effects disclosed in the circular, upon completion of the disposal, AmFIRST REIT's gearing level is expected to improve from approximately 46.6% to 33.9%, thus enhancing financial flexibility by providing additional debt headroom for yield-accretive acquisitions and/or asset enhancement initiatives.
The proposed disposal is expected to be completed by the last quarter of 2026, it added.
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