KUALA LUMPUR: Amanah Raya Bhd, which yesterday sold Japan’s Kenedix Inc a 15% stake in its real estate investment trust (REIT) for RM85.98 million, aims to double the fund size of AmanahRaya REIT in five years’ time.
Kenedix is the first Japanese corporation to sponsor a Malaysian REIT. In Japan, it manages seven REITs with total assets under management (AUM) of US$11 billion (RM49.2 billion).
Group managing director Adenan Md Yusof said it aims to grow the REIT’s fund size to RM2 billion from the current RM1 billion by acquiring better assets to improve its return to the REIT.
AmanahRaya REIT’s portfolio includes 14 properties as at Sept 30, 2016 with dividend yield of 6-7%.
“Hopefully in the future, we can give better absolute return be it in the form of dividend and also capital appreciation of the REIT,” he told reporters at the signing ceremony yesterday.
Kenedix, via its wholly owned subsidiary KDA Capital Malaysia Sdn Bhd, is acquiring the substantial interest in the AmanahRaya REIT and a 49% stake in AmanahRaya REIT Managers Sdn Bhd (ARRM) RM5.14 million.
Post acquisition, Amanah Raya will maintain the controlling stake of 51% in ARRM. It will hold a 47% stake in the REIT.
The parties also signed a shareholders’ agreement and a memorandum of understanding on a bridge fund for the purpose of acquiring and nurturing assets before injection into the REIT. Nomura acted as the sole financial advisor to Amanah Raya.
Adenan said the bridge fund will be used to identify and acquire assets at a good price as the property market is currently soft. These assets will then be injected into the REIT when it achieves returns of 6-7%.
“We have a few at the moment but we are still in negotiations. There are a few properties we are looking at (in Malaysia). It will be quite substantial and hopefully we can close a deal probably next year,” he said. The assets under negotiation include an office and industrial building.
Adenan said talks on the strategic collaboration with Kenedix were initiated by ARRM in October 2015. He stressed that the deal is not an exit strategy but a strategic alliance with Kenedix.
“All these developments will ensure that Amanah Raya would become relevant in the market place with a buoyancy for our AmanahRaya REITs in the wake of competitive market forces and global uncertainties,” he said.
He said the collaboration will create a new platform for the company to build strategic and synergistic alliance as well as foster relationship networking with international investors, bankers and developers.
“The acquisition is also expected to improve trading volume to boost AmanahRaya REIT’s unit price with Amanah Raya as catalyst contributing towards the growth in Malaysia’s foreign direct investment,” he added.
Amanah Raya is also involved in the investment of assets held in its Common Fund sized at about RM6 billion, in which 20-25% has been allocated for real estate investments.
Its portfolio comprises office buildings, logistic facilities, residential properties and retail outlets as well as new asset segments such as senior healthcare facilities and data centres.
“As Kenedix Group, we are the largest independent real estate asset management company in Japan, with AUM, including private funds backed by Japanese and overseas institutional property investors, now totaling US$16 billion,” said Kenedix Inc group CEO Taisuke Miyajima.