AmFIRST sells 13-storey office building on Jln P Ramlee for RM36m

KUALA LUMPUR (Dec 15): AmFIRST Real Estate Investment Trust (REIT) is disposing of a 13-storey office building at Jalan P Ramlee for RM36 million, cash, to realise its investment in the property.

In a filing with Bursa Malaysia today, the REIT’s manager Am ARA REIT Managers Sdn Bhd announced that Maybank Trustees Bhd, acting as trustee for and on behalf of AmFIRST REIT, had entered into a sale and purchase agreement with Techvance Properties Management Sdn Bhd, in respect of the disposal.

The property, known as AmBank Group Leadership Centre, is an office building comprising a 10-storey office block, a penthouse and a 3-level car park constructed on a freehold tract spanning 1,428 sq m.

The building is 25 years old and has a net lettable area of 57,801 sq ft. It was originally acquired by the REIT at RM19.06 million on Dec 21, 2006.

AmFIRST REIT said the disposal enables it to realise its investment in the property at an "attractive" price, considering its age and limited scope for growth on the asset value.

“The proposed disposal will also provide the trust (AmFIRST REIT) with greater financial flexibility to explore potential future acquisitions, which are more yield accretive,” it said.

The filing also mentioned that Am ARA REIT Managers intends to distribute the gain on disposal to unitholders, as income distribution.

“The balance proceeds will be utilised to repay existing bank borrowing and thus, reducing the gearing to provide additional headroom for future acquisition,” AmFIRST REIT said.

The REIT expects the proposed disposal to reduce its gearing to 37%, from 38.3% as at Sept 30, 2015.

AmFIRST REIT estimated that the disposal would be completed by the fourth quarter of financial year ending Mar 31, 2016.

AmFIRST REIT closed unchanged at 74 sen today, for a market capitalisation of RM507.9 million. -- theedgemarkets.com

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