AmanahRaya looking for assets to diversify its portfolio and improve yield

AmanahRaya Real Estate Investment Trust (AmanahRaya REIT) says its manager, AmanahRaya-Kenedix REIT Manager Sdn Bhd, is actively looking for good assets to acquire in a bid to further diversify the portfolio and improve the yield to minimise the sectoral risk.

AmanahRaya REIT said it is also making sure that the existing assets within the portfolio are well maintained for the stability of rental income and capital appreciations.

“The strategy of having assets with long-term leases by reputable lessees shall continue to be the focus of AmanahRaya REIT to ensure sustainable return,” it said in a filing with Bursa Malaysia recently.

AmanahRaya-Kenedix REIT is a partially-owned subsidiary of Amanah Raya Bhd and KDA Capital Malaysia Sdn Bhd.

The portfolio of AmanahRaya REIT includes 13 properties with a total book value of RM1.407 billion as at June 30, 2020,

The composition of investment portfolio includes Vista Tower, Dana 13, Contraves, Wisma Comcorp, Toshiba, and Block A & B, South City Plaza in the office category; SEGi University, Help University, and SEGi College in the education category; Deluge Factory in the industrial category; Holiday Villa Langkawi and Holiday Villa Alor Setar, Kedah in the hospitality category; and, Selayang Mall in the retail category.

The average occupancy rate of the 13 properties is 75 per cent.

AmanahRaya REIT said that on April 30, 2019, it had accepted an offer from a prospective buyer and agreed to sell South City Plaza for a total of RM8.5 million.

However, it said that the transaction has yet to complete. AmanahRaya REIT expects to complete the deal in the current quarter ending September 30, 2020.

For the quarter ended June 30, 2020, AmanahRaya REIT recorded a cumulative rental income of RM40.8 million as against preceding corresponding period of RM47.9 million. Rental income fell due to the decrease in income at Vista Tower and Dana 13.

AmanahRaya REIT said the Covid-19 pandemic and the resulting Movement Control Order (MCO) had also had contributed to the drop in revenue.

“The Trust had provided rental assistance or relief for the affected tenants. Interest income and other income dropped to RM390,000, a decrease of 32.8 per cent compared with the cumulative preceding quarter.

“A total of RM9.3 million was incurred for property expenses during the cumulative quarter, an increase of 7.3 per cent as compared to the preceding corresponding period,” it said.

AmanahRaya REIT said the increase of the expenses was mainly due to the higher cost incurred at Dana 13 following the change of lease arrangement earlier this year.

Source: NST