AmFIRST Eyeing More Assets

It’ll be able to buy RM500mil assets after rights issue

KUALA LUMPUR: AmFIRST Real Estate Investment Trust will be eyeing for the acquisitions of additional commercial properties in Penang, Malacca and Johor Baru soon after the completion of its rights issuance which has just been approved by unitholders.

“We are looking at several possibilities. Right now we are doing some due diligence exercise and at this point in time, we cannot disclose the size and the location of these assets (yet). After the rights (issuance), our gearing will drop to 28% (from 45.9% now) and we will have a headroom to buy another RM500mil of assets,” AmFIRST's CEO Lim Yoon Peng told journalists at a press briefing yesterday.

“We will concentrate on major growth areas but right now we have not concluded anything yet. We will look at yield-accretive acquisitions and the assets that has (the) potential for capital appreciation,” Lim added.

Lim said that the current situation of an oversupply of office space in Kuala Lumpur City Centre called for AmFIRST to look at other office space areas in Malaysia.

“The glut is mainly in the KL City areas where a lot of new office developments have taken place. To go and buy another property in KL City Centre will be challenging because the asking price is very high and the yields actually do not match,” he said.

AmFIRST owns 12 of 13 floors or 84% of office space at Summit Subang USJ in Subang Jaya.

“The board will only look at yield- accretive acquisition or at least, the buildings should be fully occupied or close to 100% occupancy. Thus, we will also be exploring other areas outside of KL City Centre,” he added.

In its press presentation, AmFIRST said that it would consider special purpose-built offices with long lease such as those with multi-national companies as its tenants.

Meanwhile, Lim said that AmFIRST aimed to achieve a 75% occupancy rate for its Menara AmFIRST (formely known as Menara Merais) in Petaling Jaya from 66.7% at present.

It also hopes to raise the occupancy rate for its Wisma AmFIRST (formely known as Kelana Brem Towers) to 75% from 73.5% currently.

“We hope to do this within this financial year (ending March 31,) 2013,” Lim said.

On its Summit USJ building in Subang Jaya, Lim said that the builders of the Light Rail Transit (LRT) extension line would soon be barricading some sections in front of the Summit, where six pillars to support the LRT tracks would be built.

“We lost 159 car parks that have been acquired by the authorities two months ago and we have been paid a compensation for this. As soon as this is completed, we will have the opportunity to release the space once again and have back part of our surface (for) carparks again,” Lim said.

Lim was referring to the Kelana Jaya LRT-Putra Heights extension and that the new LRT station would be located about 500m away from the Summit building.

Lim also said that AmFIRST would spend RM35mil to renovate the interior and exterior the office building in Summit which he expected would begin by the current financial year. This proposal is subject to the agreement of the other shareholders.

AmFIRST owns 12 of 13 floors or 84% of the office building, 100% of the hotel and 70% of the retail mall space.

The company owns eight properties throughout the Klang Valley: Bangunan AmBank Group, AmBank Group Leadership Centre, Menara AmBank, Menara AmFIRST, Wisma AmFIRST, The Summit USJ, Prima 9 and Prima 10 buildings with a total valuation of RM1.18bil.

All of these buildings have freehold tenure except for Bangunan AmBank Group and Wisma AmFIRST, which has a 99 years leasehold tenure.

By The Star Online

Source: http://biz.thestar.com.my/news/story.asp?file=/2012/5/1/business/11204977&sec=business