I REIT Managers Sdn Bhd, the management company of AME Real Estate Investment Trust (AME REIT), has identified three industrial properties for potential acquisition in the next year, potentially increasing its portfolio to 37 investment properties.
The three properties – Plot 43 in i-Park @ Senai Airport City and Plots 15 and 16 in i-Park @ Indahpura, both in Johor – have a total gross floor area of 256,828 square feet and are located in the industrial parks of AME REIT’s sponsor AME Elite Consortium Bhd.
The expected lease term of each property is for a fixed tenure of 10 years each, with Plots 43 and 15 targeted for commencement in the third quarter of 2022 and Plot 16 in the third quarter of 2023.
With the final retail price fixed at RM1.13 per unit, AME REIT’s market capitalisation amounts to approximately RM588 mil upon its initial public offering (IPO).
I REIT Managers Sdn Bhd chairman and executive director Simon Lee said this at the listing of AME REIT on the main market of Bursa Malaysia Securities Bhd today.
It opened at a premium of RM1.14 per unit, with the first trade involving 1.06 mil units. It rose to a high of RM1.20 per unit within half an hour of its debut.
For a period of five years from its listing today, AME REIT holds the right of first refusal by AME Elite, together with its subsidiary Ipark Development Sdn Bhd, to acquire industrial properties and dormitories with leasing or tenancy agreements.
“We will also have first right to relevant assets which may be targeted for acquisition in future by AME Elite and its subsidiaries, subject to other criteria,” added I REIT Managers Sdn Bhd chairman and executive director Simon Lee Sai Boon.
As of today, AME REIT’s initial portfolio of 34 industrial properties and dormitories are 100%-tenanted as of June 15, 2022, and July 15, 2022, respectively, with multinational corporations making up more than 90% of its total net lettable area of leased industrial properties.
“We are well-positioned as an industrial REIT to benefit from incoming foreign and domestic investments into Malaysia as they establish and/or expand their operations base in the country,” said Lee. “We are confident of achieving stable growth in the future.”
“Ample debt headroom”
With its listing on the main market of Bursa Malaysia, AME REIT has ample debt headroom of up to approximately RM240.8 mil to pursue potential acquisitions based on the prescribed limit of 50% of total asset value.
AME REIT’s unaudited pro forma statement of financial position as of the date of its establishment would have total indebtedness of approximately RM46.5 mil, representing approximately 8.1% of its estimated total asset value of RM574.5 mil.
The IPO exercise entailed an offering of 254.8 mil units, representing 49% of the total 520.0 mil units in AME REIT.
The retail offering of 146.3 mil units comprised 128.1 mil units offered to the shareholders of AME Elite on the basis of one unit for every five ordinary shares held in AME Elite on Aug 15, 2022; 10.4 mil units to the Malaysian public and; 7.8 mil units to eligible directors and employees of AME Elite and its subsidiaries.
Meanwhile, the institutional offering consisted of 108.5 mil units made available to Malaysian institutional investors and selected investors, including Bumiputera investors approved by the International Trade and Industry Ministry, at the institutional price determined by way of book building.
The institutional offering (excluding Bumiputera investors approved by MITI) was well-received with approximately 4.20 times cover over the 109.5 mil units made available through book building, whereas the ballot portion of the public tranche was oversubscribed by 2.46 times.
There were no proceeds raised as the IPO did not involve any issuance of new units.
Hong Leong Investment Bank Bhd is the principal adviser and sole underwriter for AME REIT’s IPO exercise and joint book runner for the institutional offering together with RHB Investment Bank Bhd. – Sept 20, 2022
Main photo credit: The Edge Markets