Amanah Raya Bhd aims to double ARREIT’s fund size in 3 to 5 years

KUALA LUMPUR (Dec 19): The strategic collaboration between Amanah Raya Bhd and Japan’s largest independent real estate asset management company Kenedix Inc, will enhance its real estate investment trust (REIT) segment and double the fund size or asset value of AmanahRaya REIT (ARREIT) from RM1 billion to RM2 billion, within three to five years.

Amanah Raya Bhd group managing director Adenan Md Yusof said the collaboration will also open up opportunities and the company may see its first foreign property being injected into the REIT’s asset portfolio in future.

ARREIT currently owns 14 properties with a total asset value of more than RM1 billion, including office buildings, an education institute building, industrial properties, hotels and retail mall.

“We do not discount any possibility, that’s the reason we want to collaborate with Kenedix. Being with them will allow us to open up more opportunities. In the future there might be Japanese properties in our portfolio,” he told reporters after the share acquisition and Memorandum of Understanding (MoU) signing today between Amanah Raya and KDA Capital Malaysia Sdn Bhd, a wholly-owned subsidiary of Kenedix Inc.

In the share acquisition, Kenedix will acquire 85,982,979 units of ARREIT representing 15% of total units in circulation for an aggregate consideration of RM85,982,979.

The company also acquired 735,000 ordinary shares of AmanahRaya REIT Managers Sdn Bhd (ARRM) representing a 49% stake for RM5,145,000 at a consideration of RM7 per share.

In the acquisition, Amanah Raya Bhd maintains the controlling stake of 51% in ARRM.

Both parties also signed a MoU to set up a bridge fund, to be funded by both companies, for the purpose of acquiring potential properties at a lower cost and to “nurture” these properties to gain 6% to 7% of yield before injecting the assets into ARREIT.

The signing ceremony was witnessed by Malaysia’s Minister of Finance II Datuk Johari Abdul Ghani and Japanese ambassador to Malaysia Makio Miyagawa.

Adenan stressed that the company is looking forward to the potential growth of the REIT’s asset portfolio and fund size.

“All these developments will ensure that Amanah Raya would become relevant in the market place, with buoyancy for ARREIT in the wake of competitive market forces and global uncertainties,” he added.

Kenedix Asia Pte Ltd president Akihiro Nakao said, Malaysia’s strong population growth, well-developed infrastructure, high level of economic strength and income level as well as expanding middle income population are the factors that attracted Kenedix.