UOA Asset Management Sdn Bhd, the manager of UOA Real Estate Investment Trust (UOA REIT), has received an offer from UOA Holdings Sdn Bhd for the sale of freehold land with a five-storey building with two mezzanine floors and three basement parking levels which is located along Jalan Pantai Jaya in front of Menara TM  to UOA REIT for RM86 million cash.

More details from UOA Reit Manager:

• The property is known as Wisma UOA Pantai, on the land measuring 3,883 sq m.
• The property would be undertaken by UOA Holdings’ subsidiary, Magna Tiara Development Sdn Bhd.
• The offer followed the rights of first refusal granted by UOA Holdings to UOA REIT to acquire suitable properties from the group.
• Wisma UOA Pantai which was completed in the second quarter of this year, has about 157,481 sq ft of lettable areas with 272 car park bays, and had been issued a certificate of fitness for occupation on July 9, 2007.
• The acquisition price of the property was based on a willing-buyer willing-seller basis after taking into consideration the market value of RM93.1 million, as appraised by an independent registered valuer in Sept 2007.
• Further details of the proposed acquisition would be announced at a later date upon the execution of the sale and purchase agreement.

SP Setia Bhd Group chief executive officer Tan Sri Liew Kee Sin was named the new Property Man of the Year in the 15th FIABCI Malaysia Property Award held at One World Hotel yesterday. 

The event was graced by the Sultan of Selangor, Sultan Sharafuddin Idris Shah.  

A total of nine awards were given out at the annual event dubbed the “Oscars” of the property industry. 

The other awards and winners were:

• MASTER Plan Category – Sentul West and Sentul East Master Plan by YTL Land and Development Bhd; 
• RESIDENTIAL Development (high rise) – Stonor Park by Beneton Properties Sdn Bhd;
• RESIDENTIAL Development (low rise) – Pinggiran Bayou by Leisure Farm Corp Sdn Bhd; 
• RESORT Development – Genting Highlands Resort by Resorts World Bhd; 
• RETAIL Development – KB Mall by YS Tang Holdings Sdn Bhd; 
• SPECIALISED Project – Sultan Abdul Aziz Royal Gallery by Laurent Lim Architect; 
• SPECIALISED Project – Persada Johor International Convention Centre by Persada Johor International Convention Centre; and 
• SPECIAL Award for National Contribution – The Kuala Lumpur Performing Arts Centre by YTL Corp Bhd. 
• Resorts World bagged the Best Resort award. 

(The Star Malaysia 28/10/07)

Atrium REIT:-

Recently, Atrium REIT (real estate investment trusts) though among the smallest in terms of market capitalisation (RM130mil), has in the past several months been enjoying quite a bit of the limelight.

Comments from AmResearch:-

• Atrium yield is comparable with the larger REITs and probably by virtue of its size and focus, it is probably also more pliable and dexterous;

• Atrium REIT’s focus is in logistics warehousing, a service industry that complements the country’s export-oriented industries. Other REITs have their focus on retail, commercial or office rental business.

• Atrium manages its business. The Reit deals with MNCs, not just anyone. Most of their tenants are from the Fortune 500 list.

• Their rental agreement is between five to six years which spells stability.

• Most of the places where their properties are sited are very strategic. Other than this recent purchase, most of their properties are freehold.

• Recently, Atrium has entered into a sale and purchase agreement to buy an industrial building at Senai Industrial Park for RM12.5mil cash. This acquisition will raise its total asset size to RM171mil from RM158mil. Rent is locked in for the next five years with multi-national company Flextronics Technology (M) Sdn Bhd until 2011. They have the option to renew that tenancy for another five years,The property sits on seven acres of leasehold land expiring in 2054. Based on the annual gross rental yield of 9.6% and having considered the incremental property and non-property expenses and higher borrowing costs, the acquisition is expected to raise its financial year 2008 dividend per unit by 5% to 8.7 sen from 8.3 sen previously. The acquisition will increase the gearing ratio to 33% from 28% currently.

• The Reit can afford another acquisition to the tune of RM55mil before hitting the 50% gearing limit [Atrium will not be exceeding a gearing level of 40%.]

• By the end of 2008, Atrium is expected to have additional RM229mil worth of acquisitions to more than double its asset size to RM450mil.

• Besides its recent acquisition in Senai, Atrium’s assets are located in Shah Alam, Puchong and Rawang. The growing trend of outsourcing of logistic services will boost Atrium’s income. It is estimated that third party logistics (outsourcing of the logistics component by MNCs) is expected to grow to US$28bil in revenue by 2012 from US$15bil last year. The market in Malaysia is expected to be worth US$3.5bil in 2007 (2006: US$3.3bil).

Property Prices & Oil Factor:

The overall increase in property prices in the country in all sub-sectors of property, also bodes well for the REIT business. Rising property prices usually parallel rental yield. The oil factor is another element. Oil prices have hit the unprecedented US$90 a barrel. This will have a domino effect across all sectors of the economy, from transport to building raw materials. With cost of construction expected to rise further, property prices are expected to move up, hence the importance of having solid assets.

(The Star Malaysia 27/10/07)

Dubai-based hospitality group Almulla has launched the world’s first syariah-compliant hotel brand portfolio to cater to demand from Muslim and non-Muslim travellers. Almulla Hospitality chairman Abdulla M. Almulla in its initial launch said that:-

• The hotel group plans to have 30 properties under three core brand names – Cliftonwood, Adham and Wings – by the end of 2008, with Malaysia being one of its targeted destinations,

• The group’s overall strategy was to reach 150 hotels by 2013 with expected total investment of over US$2bil,

• Institutional investors and high net worth individuals would be the backbone for such a growth drive,

• All properties operating under the brands would serve only halal prepared food, as interpreted by syariah laws and the syariah supervisory board,

• Although there were plenty of individual syariah-compliant hotels worldwide, their positioning was usually dictated by the owner, either as an independent hotel, one within a chain or due to the syariah laws of a country where they are situated whereas Almulla’s brand proposition is so distinct that guests will be confident that its brand values have universal consistency as the Muslim traveller market was expanding around the world due to the increasing wealth in their communities, combined with conscious lifestyle living, and it represented 10% of the world tourism market, being one of the fastest growing segments. Their average spending is 10% to 50% higher than that of the average leisure or business traveller. The bottomline is that conscious lifestyle tourism is expected to grow at a rate of 20% per annum, five times more than the average traditional market segment,

• According to the group, the specific destinations targeted are Saudi Arabia, the United Arab Emirates (UAE), Jordan, Egypt, Malaysia and Thailand.

• It is also looking forward to setting up operations in Europe with 15 deluxe hotels, to be followed by 25 business hotels in “the second European wave”.

• The group plans to capture the Gulf Cooperation Council travellers who contribute over US$12bil annually on leisure travel alone.

According to the World Tourism Organisation,

• Saudi Arabia is one of the biggest outbound travel markets in terms of average spend with tourists from the kingdom spending US$6.7bil annually on overseas travel.

• The UAE travellers are close behind, at more than US$4.9mil, averaging US$1,700 per trip, which is US$500 higher than the European average.

Source: Bernama(26/10/07)

AmanahRaya real estate investment trust (AR-REIT) has become Malaysia’s second largest REIT after Starhill REIT in terms of asset size at about RM649mil, following the injection of five new properties.[ Starhill REIT has over Rm1bil of asset size in Malaysia.]According to the manager of AR-REIT, AmanahRaya-JMF Asset Management Sdn Bhd (AJMF) managing director Datuk Mohamed Azahari Kamil:

• The total of 13 properties give a net property yield of 7.4% to 7.5%,

• AR-REIT has a diversified portfolio mix of education (31%), industrial (29%), commercial (27%) and hospitality (7%) assets,

• The addition of the five new properties worth RM308.67mil would provide unitholders stable distribution and growth in the net asset value per unit of AR-REIT. This additional five assets were public listed companies that provided stable distribution to unitholders. The five new properties are the Tamadam bonded warehouse in Port Klang, the Silverbird factory in Shah Alam, AIC Corp Bhd’s factory in Shah Alam, Segi College in Kota Damansara and Naza warehouse in Gurun

• 70% of its proposed private placement of up 100 million units in AR-REIT was allocated to foreign investors. This proposed placement was approved by its unitholders at the company EGM yesterday and to be used to finance the proposed acquisitions and improve AR-REIT’s trading liquidity.

• The proposed placement would be 73.6% funded by equity and the remainder by debt,

• AR-REIT hoped to reduce its gearing to 36.9% after the proposed placement from 46.3% currently and would stand at 37.2% after the proposed acquisition of the five assets. The exercise is expected to be completed by year-end.

• AR-REIT would also acquire one to two commercial projects in the Klang Valley and the city centre,

       (The Star Malaysia 27/10/07)

According to FIABCI-Malaysia honorary treasurer Yeow Thit Sang, as a result of more buildings around, this year’s contest has a whopping 45 entries compared with last year’s 39 and 30-odd in 2004.

Introduction:

• This FIABCI Property Awards was initiated 15 years ago during the Asian financial crisis and the property development sector was in a “down cycle”.

• An objective of the Malaysia Property Awards is to select the country’s entries to the world “Prix d’ Excellence” awards presented at the FIABCI World Congress. The participants comprise anyone within the real estate life cycle, from architects to marketing agents, Continue reading ‘Malaysia Property Awards, FIABCI’

Aseambankers Malaysia Bhd announced that:-

• Axis REIT Managers Bhd’s proposed acquisition of a five-storey building for RM37mil will boost its asset size to RM618mil, bringing it closer to its target size of RM800mil by year’s end, This proposed buy represents its 16th property which is an office and factory in Petaling Jaya, from Wah Seong Industrial Holdings Sdn Bhd. Continue reading ‘Axis REIT Purchase of Building To Close Asset Target’