RM242.86m to buy five properties: Al-Salam REIT

KUALA LUMPUR: Johor Corp’s (JCorp) Islamic Real Estate Investment Trusts (REIT), named Al-Salam REIT, en route to a listing on the Main Market of Bursa Malaysia, will use the bulk of proceeds from its initial public offering (IPO) to pay for the purchase of five properties.
The company is expected to be listed on Sept 29.
Al-Salam REIT’s IPO entails an offer for sale of 252.36 million units, of which 240.76 million units (98%) will be made available to institutional and selected investors, while the remaining 11.6 million units will be for the public, at an offer price of RM1 per unit.
Of the RM252.36 million raised, the bulk or RM242.86 million will be used to pay for the properties, while the remaining RM9.5 million will be for listing expenses.
Upon listing, the group expects a 6.41% yield for 2016.
“As the sponsor, JCorp believes that Al-Salam REIT will not be affected by the current market scenario since the REIT is backed by assets and steady income and generally not subjected to the volatility of the market and is stable in nature,” JCorp president and CEO Datuk Kamaruzzaman Abu Kassim said.
Speaking at a press conference in conjunction with the REIT’s prospectus launch here last Friday, he said Al-Salam REIT’s assets are resilient, considering their strategic location and the industry that the assets are operating in.
The group expects to double its assets value to RM2 billion within two to three years through Al-Salam REIT, from a total value of RM903.14 million currently.
“The group will inject RM300 million to RM400 million into Al-Salam REIT from next year onwards. Within two to three years, maybe we can double the assets,” Kamaruzzaman said.
He said Al-Salam REIT’s initial portfolio would consist of 31 assets, which include Komtar JBCC, Menara Komtar, @Mart hypermarket, KFCH College and the chain of 27 KFC and Pizza Hut restaurant outlets nationwide and selected industrial assets.
The REIT will be managed by Damansara REIT Managers Sdn Bhd, while AmanahRaya Trustees Bhd will be the trustee.