MPHB makes property thrust

MULTI-PURPOSE Holdings Bhd (MPHB) will use cash from the privatisation of its gaming subsidiary Magnum Corp Bhd to venture into property development in a bigger way, its top official said.The move will provide the group with a new earnings stream as it seeks long-term growth, managing director Datuk Surin Upatkoon (pic) said.He said MPHB, which stands to get up to RM731 million from the privatisation exercise, already has two hectares of prime land along Jalan Sultan Ismail in Kuala Lumpur on which it is planning a commercial development.The group expects to obtain the planning approval for it by year-end. It also wants to increase its landbank in Malaysia and has the first right of refusal to buy land owned by Magnum."It's still premature to say how much of the proceeds we'll use for property development, (but) it'll be one of our core businesses and will start contributing to the group from 2009 onwards," Surin told reporters after shareholders gave their approval for the privatisation yesterday.The Magnum buyout, which MPHB is undertaking with global private equity firm CVC Capital Partners Asia III Ltd, is expected to be completed by June this year, he said.MPHB is now on the brink of a growth phase after successfully cutting debt to some RM200 million today from a peak of over RM2 billion about five to six years ago.

(New Straits Times 2-4-2008)

AmREIT to increase assets under management by 45%

PETALING JAYA: Am ARA REIT Managers Sdn Bhd (AmREIT), the manager of AmFIRST Real Estate Investment Trust (AmFIRST), increased the assets under management by 45% to RM835mil after acquiring all the developer’s units at The Summit Subang USJ. Director Cheah Tek Kuang said on Monday he was confident of improving the performance of The Summit retail mall to attract more shoppers and provide them with a satisfying shopping-cum-lifestyle experience. Read more

(The Star 2-4-2008)

Al-Hadharah Boustead REIT in for more upside

MOST analysts are upbeat on Al-Hadharah Boustead Real Estate Investment Trust (REIT), saying there should be further upside to the stock's performance.A local analyst said while market sentiment remained weak, the Al-Hadharah Boustead REIT could continue to perform well in the medium to long-term.Despite uncertainties in the US economy, industry experts are bullish on plantation as palm oil supply is still tight and expect CPO prices to trade above RM2,500 per tonne – AFP “Our confidence in the REIT stems from the prevailing positive trend in the global commodities markets and buoyant crude palm oil (CPO) prices,” he told StarBiz.Last Friday, the CPO price closed at RM3,543 per tonne and commodity price is expected toremain firm in the near-term.Currently, Al-Hadharah Boustead REIT was the only oil palm plantation REIT listed on Bursa Malaysia and was shariah-compliant.The analyst said: “The REIT manager plans to grow its asset base and expects to acquire at least two more plantations before year-end to add to its stable of eight palm oil estates and two palm oil mills in Peninsular Malaysia.”“The new plantations should translate into better performance of the trust,” he added.Tan Sri Lodin Wok Kamaruddin At the end of last year, Al-Hadharah Boustead REIT had a market capitalisation of RM665mil covering 12,000ha, making it arguably the second largest REIT listed on the exchange at that time. read more

Local REITs gain global attention

BARELY three years after Malaysia's first real estate investment trust (REIT) was on the stock exchange, the industry crossed a new milestone with Wednesday's signing of a partnership agreement between Hektar Klasik Sdn Bhd and Singapore-based Frasers Centrepoint Asset Management (M) Pty Ltd (FCAM). Today, not only have local REITs grown in market capitalisation to over RM1bil, investors can look forward to enjoying the benefits of this first cross-border REIT partnership. This surely augurs well for the industry as a whole and for the REITs in terms of global recognition by institutional investors. Commenting on the cross-border REIT partnership, Hektar Asset Management Sdn Bhd chief executive officer Datuk Jaafar Abdul Hamid said the joint venture would benefit both parties. “It would help harness the combined strengths of the sponsors: FCAM's strategic reach and financial resources within South-East Asia and Hektar group's experience and expertise in Malaysia. “We have extensive understanding of the Malaysian market and we are gaining momentum in growing the REIT's asset size, especially with our recent retail acquisition in Johor,” he said.

(The Star 8-3-2008)

Emkay plans property trust

One property that could feature in the real estate investment trust is the RM100 million Bangunan Mustapha Kamal in Cyberjaya, says Emkay chief operating officer. THE Emkay Group of companies, which is controlled by Tan Sri Mustapha Kamal Abu Bakar, plans to set up a property trust.Mustapha is the chairman and dominant stakeholder of MK Land Holdings Bhd, a publicly-traded property developer listed on the main board of Bursa Malaysia.He holds a 48.7 per cent stake in MK Land via privately-held MKN Holdings Sdn Bhd. MKN in turn is one of Emkay's many subsidiaries.Emkay chief operating officer Peter Teh Heng Poh said that one of the properties that could feature in the real estate investment trust (REIT) is the RM100 million Bangunan Mustapha Kamal in Cyberjaya.The property is due to receive its certificate of fitness this month. Read more

(New Straits Times 5-3-2008)

S'pore REITs may merge as credit squeeze tightens

SINGAPORE: Singapore's once booming real estate investment trusts (REITs) may face a round of mergers to weed out the weak who find it increasingly tough to raise funds and refinance loans because of the global credit crisis. At least six of Singapore's 20 listed REITs are valued below what their properties are worth, as are many trusts in Japan and Australia, which means expansion is hampered by higher financing costs and investor returns are limited.Some of the trusts will face higher interest payments when they need to refinance their debts in coming months, leading to lower earnings and distribution to unitholders."I would expect consolidation to gather pace in the course of the next 6-12 months," said Tony Darwell, head of Asian equity research at Nomura. "The cost of debt has risen and it is impacting everyone, especially entities that are highly geared." Read more

(New Straits Times 5-3-2008)

REITs confident of 6% growth

MOST real estate investment trust (REIT) managers are confident that the Malaysian REIT industry will remain resilient and a minimum yield of 6% is achievable this year despite a looming recession in the United States. The REIT managers believe properties under trusts are generally more protected in terms of value compared with properties held by individual owners, as they were mostly locked-in or leased to established clients or multinationals which normally would not default on their rentals. Axis REIT Managers Sdn Bhd chief operating officer Stewart LaBrooy said the target of 6% yield was not a problem for Axis REIT as it had a strong clientele base and that the trust was managed well. Read more>

(The Star 25-2-2008)

SEGi sharply reduces bank debts

PETALING JAYA: SEG International Bhd (SEGi), which sold its flagship campus in Kota Damansara to AmanahRaya Real Estate Investment Trust last year, has reduced its bank borrowings to 20% of equity from 100% previously. It sold the college for RM145mil with an agreement to lease back the property for 15 years. SEGi is the owner of SEGi College Malaysia, which itself is a consolidation of the Systematic and Prime education groups. "We are targeting student growth of between 15% and 20% this year" - DATUK CLEMENT HIISEGi chief executive officer Datuk Clement Hii said this was achieved after the consolidation of the group, which started in 2006, and the sale of the Kota Damansara campus. Read more

(The Star 19-2-2008)

Al-'Aqar KPJ REIT may double in size

THE Al-'Aqar KPJ REIT, the world's first Islamic healthcare property trust, may buy more hospitals in Malaysia and abroad to double its size.It has bought 11 hospitals from KPJ Healthcare Bhd for about RM631 million so far. It may buy the remaining seven that KPJ has in Malaysia this year, said Datin Paduka Siti Sa'diah Sheikh Bakir.Al-'Aqar may even buy the six hospitals that are operated by KPJ overseas, she said."When we explained to them (the hospital owners), it opened their mind," said Sa'diah, managing director of KPJ Healthcare and a director of Damansara REIT Managers Sdn Bhd, which manages Al-'Aqar.KPJ operates three hospitals in Indonesia, two in Jeddah and one in Dhaka.Having a REIT has helped KPJ grow faster, Sa'diah said. The company may also reduce its debt and hike dividend payouts."We are asset light, we can spend (to expand)," she said.KPJ holds about 48 per cent of Al-'Aqar.Read more

(New Straits Times 19-2-2008)

Malaysia REIT Watch

1. Atrium REIT Interim Income Distribution: Its shares will go ex-dividend from Feb 11 (final income distribution of 2.3 sen per share tax exempt).
2. Starhill REIT Interim Income Distribution: Its shares will go ex-dividend from Feb 11 (final income distribution of 3.4 sen per share tax exempt).
3. Al-Hadharah Boustead REIT Final Distribution: Its shares will go ex-dividend from Feb 13 (final income distribution of 7.22 sen per share tax exempt).

(11-02-2008 The Edge)

QCT sees property acquisition by June

KUALA LUMPUR: Quill Capita Management Sdn Bhd (QCM), manager of the Quill Capita Trust (QCT) real estate investment trust (REIT), expects to announce a new property acquisition by June this year. “We are in quite advanced negotiations with one party and will make an announcement once we are ready to sign something. If everything goes well, we can announce something by June,” QCM chief executive officer, Chan Say Yeong told The Edge Financial Daily. Chan added the company was confident of acquiring assets from third parties and not just from its sponsors, the Quill Group of Companies and Singapore’s CapitaLand Ltd. Read More

(6-2-2008 The Edge)

Aeon still weighing REIT options

RETAILER Aeon Co (M) Bhd is in no rush to set up its planned real estate investment trust (REIT), comprising seven properties valued at about RM700 million, as it views the local REIT market to be still at its infancy."We are still watching and evaluating the industry. We are doing our own study on the REIT," an official from Aeon who declined to be named said.He added that Aeon, which operates the Jusco department store-cum-supermarket chain, felt that since the Malaysian REIT industry was only about three years old, his company preferred to take the wait-and-see stand."We feel the REIT industry is still new," he said.On whether Aeon would consider listing the trust vehicle elsewhere, the official said: "We will consider all options ... but at this stage it is still too early to say." Read More

(9-2-2008 New Straits Times)

Islamic healthcare REIT wins Euromoney award

AL-'AQAR KPJ REIT, the first Islamic healthcare REIT in Malaysia, has won the Islamic Finance Award for the Most Innovative Deal Category from Euromoney magazine.Euromoney is a leading capital markets magazine for professionals around the globe involved in the world of banking.Its managing director Simon Brady presented the award to KPJ Healthcare Bhd managing director Datin Paduka Siti Sa'diah Sheikh Bakir in London on Tuesday.The award was for the issuance of up to RM300 million Sukuk Ijarah Programme by Al-'Aqar Capital Sdn Bhd, a wholly-owned subsidiary and funding vehicle of Al-'Aqar KPJ REIT. Read more

(7-2-2008 New Straits Times)

Hektar REIT Pays Higher Dividends

KUALA LUMPUR: Hektar Real Estate Investment Trust has announced that the dividend per unit for the 13-month period ended Dec 31, 2007 would be 10.71 sen, 11.2% higher than it had forecast in its prospectus. In a statement, it said gross revenue for the year reached RM78.3mil, which was 5% above forecast and net income (realised) stood at RM36.7mil. Hektar REIT, managed by Hektar Asset Management Sdn Bhd, reported net income per unit of 11.46 sen, which was 19% higher than forecast when the REIT was launched in December 2006. Read More

(6-2-2008 The Star)

Hektar REIT posts RM80.5m net income

KUALA LUMPUR: Hektar Real Estate Investment Trust (Hektar REIT) posted a net income of RM80.52 million for 13 months ended Dec 31, 2007 while revenue stood at RM78.45 million, comprising gross rental income of RM78.3 million, interest income of RM121,858 and other income of RM1,500. It said the actual revenue for the 13 months exceeded the forecast by 4.7% while actual expenses were capped within the forecast. The total income distribution stood at 10.71 sen per unit totalling RM34.27 million for the 13 months, surpassing its published forecast by 11%. Earnings per share stood at 25.16 sen. Hektar REIT was launched in Dec 1, 2006.

(5-2-2008 The Edge)

AmFirst REIT Posts RM8mil Net Income

KUALA LUMPUR: AmFirst REIT (real estate investment trust) recorded a net income of RM8mil, net property income of RM10.5mil and revenue of RM15.2mil for its third quarter ended Dec 31, 2007. Am ARA REIT Managers Sdn Bhd acting chief executive officer Anthony Ooi Kwee Yang said in a statement that while growth via acquisition was important, the REIT manager was also focused on asset enhancement.

(5-2-2008 The Star)

Axis REIT Acquiring Assets For RM27mil

Axis Real Estate Investment Trust (Axis REIT) said its trustee OSK Trustees Bhd has signed sale and purchase agreements with vendors to acquire assets for RM27mil.The assets are a single-storey detached factory with ancillary buildings and a one-storey warehouse building with a 3-storey office and guardhouse and ancillary buildings.Axis REIT said in a statement the leasehold properties were in the Pasir Gudang industrial area developed by Johor Corp.Axis REIT manager, Axis REIT Managers Bhd, intends to fund the acquisitions through a recent capital raising exercise, in which 50 million new units were successfully placed out.

(2-02-2008 The Star)

AmanahRaya Aims To Increase Rental Yield

By embarking on a strategy to expand the lettable areas of properties in its portfolio, Amanah Raya Real Estate Investment Trust (AmanahRaya REIT) –the first government –owned REIT company to be listed on Bursa Malaysia- hopes to improve its performance. With an asset size of RM649 million, the REIT, which owns 13 properties, will offer an annual yield of about 6.9 per cent based on its initial public offer price of 94 sen for the financial year ending Dec31, 2007.

(2-02-2008 New Straits Times)

Quill Shows How To REIT It Well

Going strong on the acquisition trail since listing has enabled Quill Capital Trust to surpass it own expectations. The stellar performance is mainly due to income received from its acquisitions of Wisma Technip and several commercial units in Plaza Mont Kiara, both in Kuala Lumpur.

(2-02-2008 New Straits Times)

UOA Pantai Injected Into REIT

Located on a 0.89 acre freehold plot in Jalan Pantai Jaya, UOA Pantai is a five storey office building with two mezzanine floors and three basement car-parking levels. Its nett lettable area of 157,481 sq.ft, is currently 86 per cent occupied, with the Ministry of Housing and Local Government occupying two-thirds of the rented area.

(02-2-2008 New Straits Times)