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KUALA LUMPUR (Oct 4): Atrium Real Estate Investment Trust (REIT) has proposed to acquire a piece of industrial land measuring 1.3ha in Shah Alam, Selangor, for RM23 million.
In a bourse filing today, Atrium REIT said it has entered into a sale and purchase agreement with Pacific BBA (Malaysia) Sdn Bhd for the freehold land, along with the office building and factories present on the tract.
Currently, the property, with a net lettable area of about 85,000 sq ft, is fully rented out to construction outfit Nagatron Engineering Sdn Bhd.
"The proposed acquisition is in line with Atrium REIT's investment objectives and growth strategy to provide the unitholders with stable income distribution and to achieve long-term growth in the net asset value per unit of Atrium REIT, by acquiring industrial property in prime locations with recurring rental income.
"The proposed acquisition is expected to be accretive to Atrium REIT's distributable income," it said.
The land's price tag is at a 4.5% premium to the market value of the property, valued at RM22 million by Raine & Horne International Zaki + Partners Sdn Bhd.
Atrium REIT said it intends to fund the purchase with a combination of internal funds and debt financing, which will increase its bank borrowings by RM18.4 million, thus elevating its gearing ratio to 30.3%, from 27% as at Dec 31, 2015.
The REIT expects the acquisition to contribute positively to its future earnings upon completion, which is expected to be by year-end.
Atrium REIT fell 1 sen or 0.93% to RM1.07, giving a market capitalisation of RM130.33 million. — theedgemarkets.com
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