Bursa Building

Axis REIT purchase of building brings it closer to asset target

The Star, 18, 2007

PETALING JAYA: 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, Aseambankers Malaysia Bhd said.

In an announcement on Friday, Axis REIT proposed the buy of its 16th property, an office and factory in Petaling Jaya, from Wah Seong Industrial Holdings Sdn Bhd.

“The acquisition price appears fair at RM353 per sq ft with rising capital values,” said Aseambankers analyst C.T. Ong in a report. “The price compares well with recent office property transactions in the vicinity, like Nestle House at RM375 per sq ft and Menara Merais at RM358 per sq ft.”

The acquisition was expected to record a net property income of about RM2.6mil a year, or a net property yield of about 7%, he said, noting that it would increase Axis REIT’s net profit by 3.3% for the financial year ending Dec 31, 2008.

The acquisition, expected to be completed by February next year, was anticipated to generate income of some RM960,000 a year for the trust, Ong said.

Read more from The Star website.

See Axis Real Estate Investment Trust

Atrium REIT buys property

The Star, 18, 2007

KUALA LUMPUR: Atrium Real Estate Investment Trust (REIT) has acquired an industrial building at Senai Industrial Park, Johor for RM12.5mil from Yong Jin Development Sdn Bhd.

In a filing with Bursa Malaysia, Atrium REIT said the property would be leased to Flextronics Technology (Malaysia) Sdn Bhd for five years. The tenancy which expires at the end of 2011 has the option for further five years. It said the rental income would provide Atrium REIT with an annual gross yield of about 9.6%.

The acquisition comprises 2.8 ha leasehold land expiring in 2054 and housing an electronic factory with a net lettable area of 125,173 sq ft. – Bernama

See Atrium Real Estate Investment Trust

Real Estate Investment Trust (REIT) in Bursa Malaysia

So far there are 9 REITs listed in Bursa Malaysia.

  1. 5116-ALAQAR (Al-’Aqar KPJ Reit)
  2. 5124-BSDREIT (Al-Hadharah Boustead Reit)
  3. 4952-AHP (Amanah Harta Tanah PNB)
  4. 6696-AHP2 (Amanah Harta Tanah PNB 2)
  5. 5127-ARREIT (Amanahraya Real Estate Investment Trust)
  6. 5120-AMFIRST (Amfirst Real Estate Investment Trust)
  7. 5130-ATRIUM (Atrium Real Estate Investment Trust)
  8. 5106-AXREIT (Axis Real Estate Investment Trust)
  9. 5121-HEKTAR (Hektar Real Estate Investment Trust)

Real Estate Investment Trust (REIT)

Invest in Real Estate Investment TrustReal estate investment trust typically in the form of a trust fund which pools money from investors and uses the pooled capital to buy, manage and sell real estate assets, such as residential or commercial buildings, retail or industrial lots, or other real estate-related assets. It is a passive investment vehicle which acquires and holds income generating real estates. REITs are driven entirely by recurrent rental income from real estates and with the present tax structure governing REITs, distribute at least 90% of its income to unit holders, thus providing stable and consistent income to unit holders.

Why should you invest in REITs?

  • Stable and recurrent income
    REITs are driven entirely by recurrent rental income from real estates. It distributes at least 90% of its income to unit holders, thus providing stable and consistent income to unitholders.
  • Diversification
    REITs invest in a variety of real estates at different geographic locations. This diversification strategy reduces the negative effects associated with holding assets in a single location.
  • Professional management
    Professional managers manage REITs and they have the expertise beyond the knowledge of individual investors.
  • Liquidity
    Unlike traditional private real estate ownership, REITs are liquid assets that can be sold fairly quickly to raise cash or take advantage of other investment opportunities. One of the reasons for the liquid nature of REITs is that its units are primarily listed and traded on a stock exchange.
  • Affordability
    Unlike direct property investments, where investors would require a large capital to invest, REITs provide average investors with the ability to invest and diversify their real estate investments without a large capital.
  • Convenience
    Sale and purchase agreements, lawyers’ fees and stamp duties are among the many things real estate investors have to put up with. Through REITs, investors are relieved of such factors.
  • Comfort of regulations
    REITs must comply with the requirements of the Securities Commission Act 1993 , the Guidelines on Real Estate Investment Trusts and the Guidelines on Islamic Real Estate Investment Trusts , which has investor protection as its main objective.

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