KUALA LUMPUR: AME Real Estate Investment Trust (AME-REIT), which is on its way to the main market in Bursa Malaysia, intends to add assets to its real estate portfolio after listing.
It is embarking on a two-pronged growth strategy to increase its income distribution returns to shareholders.
“As a REIT, we envision a growth trajectory through increasing portfolio size.
“We are currently in discussions with various parties and the board has given me the mandate to review third-party acquisitions,” Chief Executive Chan Wai Leo said during a press briefing after the launch of his prospectus here yesterday.
AME-REIT, which is an industry-oriented trust, will have first right of refusal on all future assets that potentially arise from AME Elite’s development projects that meet the criteria of the trust.
It will have an initial portfolio of 34 industrial and industry-related properties located in Iskandar Malaysia in Johor, valued at RM557 million.
Chan said AME-REIT would have an indicative pro forma distributable yield of over 5.5% when listed, based on a 2023 fiscal year ending March 31 (FY23).
“This is based on FY23 distributable income of RM34 million and benchmark price of RM1.15 per unit,” Chan said.
The REIT is expected to go public on September 20.
This would involve AME Elite selling certain assets to the newly created AME-REIT entity funded by issuing public shares in AME-REIT. The Properties will form the Trust’s portfolio.
The initial public offering (IPO) was for 254.8 million trust units, or 49% of AME-REIT’s total of 520 million units.
This listing included a retail offering of up to 174.8 million trust units and an institutional offering consisting of at least 80 million units.
There would be no proceeds raised by the REIT as the IPO would not involve any issuance of new shares, he added.
Hong Leong Investment Bank Bhd is the lead advisor and sole underwriter, and joint bookrunner with RHB Investment Bank Bhd.