AmFirst REIT to buy The Summit Subang USJ for RM260m

AmFirst REIT to buy The Summit Subang USJ for RM260m
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PETALING JAYA: AmFirst Real Estate Investment Trust (AmFirst REIT) has proposed to acquire Meda Inc Bhd's mixed commercial development, The Summit Subang USJ, for RM260mil in cash.

The proposed acquisition would include, among others, Menara Summit, The Summit Hotel and a six-storey retail podium, AmFirst REIT told Bursa Malaysia in a filing yesterday.

The proposed acquisition would be funded with bank borrowing and/or equity, the company said.

AmFirst REIT said its manager, Am ARA REIT Managers Sdn Bhd, was actively looking to acquire yield-accretive assets or good quality properties with strong recurring rental income, for revenue and capital growth.

“The proposed acquisition is expected to provide unit holders with higher and more stable distribution with the potential to achieve long-term growth in net asset value of AmFirst REIT,” it said.

Am ARA intends to leverage on the expertise of its Singapore-based partner, the ARA Group, to raise the performance level of The Summit Subang USJ.

The ARA Group currently manages three public-listed REITs in Hong Kong and Singapore, with total assets under management worth about US$4.2bil.

Meda, meanwhile, said the sale of The Summit Subang USJ would effectively reduce the group's gearing and enhance its balance sheet.

“The proposed sale will provide the company with the resources needed to expand and grow its core business with the ultimate objective of enhancing shareholder value and returns in the future,” it added.

Both parties are expected to finalise the deal by the first quarter 2008.