AmanahRaya REIT's manager plans to add a commercial building-office space and two industrial buildings to its assets by year-end, but has deferred plans to list a REIT in Singapore

THE manager of the AmanahRaya Real Estate Investment Trust (AR-REIT) plans to inject three properties valued at about RM300 million into the REIT before the year-end, an official said.

This will take the total asset value of Malaysia's second largest REIT to about RM1 billion from RM645 million currently.

"It's going to be three properties in one injection," said Datuk Mohamed Azahari Mohamed Kamil, a director in AmanahRaya-JMF Asset Management Sdn Bhd, the manager.

"This is going to be a commercial building-office space as well as two industrial buildings. One is in the Klang Valley while the other two are outside, but in very good locations," he said, when met by Business Times recently.

One of the buildings is already owned by AmanahRaya-JMF's parent company, Amanah Raya Bhd (ARB), while the other two will be new acquisitions, he said, declining to elaborate.

He is targeting to obtain all relevant approvals from the Securities Commission later this year and have the additional units listed before December 25.

On another matter, Azahari said plans to list a REIT in Singapore with an Indonesian partner have been postponed because of soft market conditions there.

The REIT, equally owned by ARB and Indonesian property firm Gapura Prima group, was to have been listed in Singapore by March 2008.

"We had got all those plans ready but unfortunately the market is very soft in Singapore, particularly for REITs, so we decided to put it on hold for the time being. We will find an opportune time to have it listed," he remarked.

Azahari said the REIT market at home too is soft at present but believes that players should create more value by doing asset injections.

AmanahRaya-JMF has been active at this, having injected five additional assets and nearly doubling AR-REIT's asset value in less than a year after its listing in early 2007. It comprises 13 assets now.

Azahari aims for the REIT's size to touch the RM2 billion mark by the end of 2010.

"We are looking at potential buildings to be injected as an ongoing yield-accretive type of strategy," he said.

ARB is currently in talks to buy the Kenanga International building in Jalan Sultan Ismail from Injaz AsiaEquity Property Bhd, which may be injected into the REIT in a later year.

Azahari, who hopes to finalise the purchase by the year-end, said the market value of buildings in that area is about RM600 to RM900 per sq ft (psf).

Injaz had bought the 22-storey office building last June for just RM165 million cash, or RM555 psf.

Azahari continues to be positive on the property market's prospects, especially on assets in prime locations.

"We believe that Malaysia has a lot more value that can be reaped. If you look at properties now, even within the KLCC, they are all undervalued ... so there's a lot of opportunity for growth," he said.

He said AR-REIT, which reported a first quarter net profit of RM7.6 million this year compared with RM1.2 million in the same period last year, would focus only on local assets for now.