KUALA LUMPUR: Trust company Amanah Raya Bhd plans to grow its real estate investment trust (REIT) over the next five years by doubling the fund size and acquiring better assets to improve the returns to the Reit shareholders.
To date, Amanah Raya REIT (ARREIT) has a combined property value of RM1bil.
In the next three to five years, this value will be doubled to RM2bil.
Amanah Raya group managing director Adenan Md Yusof said these goals would be achieved by leveraging on the new strategic alliance with Japan’s largest independent real estate asset-management company Kenedix Inc.
“Currently, our REIT has a dividend yield of 6% to 7%.
“We hope to give better returns in the future – absolute returns, in the form of dividends as well as capital appreciation of REIT assets,” said Adenan after an agreement signing ceremony with Kenedix.
Kenedix, through wholly owned subsidiary KDA Capital Malaysia Sdn Bhd, has acquired a 15% stake in ARREIT or 85.98 million shares for an aggregate consideration of RM85.98mil.
Additionally, Kenedix acquired a 49% stake or 735,000 ordinary shares in AmanahRaya Reit Managers Sdn Bhd (ARRM) for RM5.15mil at a consideration of RM7 per share.
Post-acquisition, Amanah Raya will continue to have control over the REIT manager, where it will still have a 51% stake.
“We are not just selling shares to exit the REIT. This is a strategic alliance. Hence, the selling of our units is purely strategic.
“With Kenedix as the expert in asset management, we hope to leverage on its expertise and strength to ensure future growth for ARREIT,” said Adenan.
Both parties also signed a memorandum of understanding on a bridge fund for the purpose of acquiring and nurturing assets before being injected into ARREIT.
According to Adenan, this bridge fund will benefit ARREIT in the long run, as it will be used to identify properties that are not yet good enough to be injected into the REIT.
“These properties can be purchased at a low price which will later be developed and nurtured to produce returns of 6% to 7%. Only then will we inject these properties into the REIT.
“We have not set a value for the bridge fund and will announce it in due course,” he said.
Adenan added that through the collaboration, Amanah Raya can strategise plans moving forward and capture opportunities available during the soft property market.
Amanah Raya is in talks to acquire several properties for its REIT, with one of it being an office building.
Though the properties selected depend on the yield, Amanah Raya focuses more on industrial buildings over malls.
Kenedix manages new asset segments such as senior healthcare facilities and data centres, in addition to conventional asset classes such as office buildings, logistics facilities, residential properties and retail outlets.
The two landmark agreements, witnessed by Second Finance Minister Datuk Johari Abdul Ghani, were signed between Adenan and Kenedix Asia Pte Ltd president Akihiro Nakao, representing KDA Capital Malaysia Sdn Bhd.
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