AME REIT aiming for 100% lease renewal in FY2024

JOHOR BARU: Shariah-compliant industrial REIT AME Real Estate Investment Trust (AME REIT) is aiming for 100% renewal of the 12 leases expiring in the financial year ending March 31, 2024 (FY2024) to reinforce the REIT’s future earnings.

Of the 12 leases, AME REIT has successfully renewed leases with five existing tenants, obtained one replacement tenant, and confirmed lease renewals with six existing tenants, which will be finalised by end-FY2024. With this, AME REIT is on track for 100% occupancy rates across all industrial- and industrial-related properties.

Chan Wai Leo (pix), CEO and executive director of I REIT Managers Sdn Bhd, the management company of AME REIT is buoyant of AME REIT maintaining its full occupancy position with healthy rent escalations.

Chan said, “We are confident that our strong proposition as an innovative and value-accretive asset manager will bode well in retaining our tenants at improved rental rates, thereby enhancing our earnings stability. As part of an integrated industrial space solutions provider via our sponsor AME Elite Consortium Bhd, we have both the capability and speed to work proactively with our tenants to customise to their requirements.”

AME REIT now has 36 properties in its portfolio, with the acquisition of another industrial property on track for completion in FY2024. The acquisition will bring AME REIT’s total investment property value to RM668 million, where all properties enjoy full occupancy.

On top of that, Chan said they are on the lookout for new properties in Johor, Klang Valley, and the northern region to further strengthen their asset base. In this respect, they are targeting approximately RM100 million acquisition to expand their portfolio, and continue to reinforce their reputation as a leading industrial REIT in Malaysia.”

AME REIT is in the process of acquiring Plot 16 Indahpura, where construction has been completed and is now pending the issuance of certificate of completion and compliance. The acquisition is expected to be completed in the first quarter of 2024. The property is slated to be fully occupied and income generating prior to or on the completion of the sale and purchase agreement.

This comes after AME REIT had acquired Plot 43 SAC and Plot 15 Indahpura on March 24, allowing AME REIT to recognise three months contribution in the first quarter ended June 30, 2023 (1Q24), versus eight days in the preceding fourth quarter ended March 31, 2023 (4Q23).

Thanks to the full-quarter contribution from two recently-acquired industrial properties, AME REIT reported increased net property income (NPI) of RM10.7 million in 1Q24 compared to RM10.2 million in the preceding quarter 4Q23.

As AME REIT was listed on the Main Market of Bursa Malaysia Securities Bhd on Sept 20, 2022, there is no comparison with the previous corresponding quarter and period.

Alongside the financial performance, AME REIT will reward unitholders with 100% distribution of distributable income amounting to RM9.4 million, or 1.80 sen distribution per unit for 1Q24.

The distribution is payable on Sept 18, 2023 to unitholders whose names appear in the Record of Depositors of AME REIT at the close of business on Aug 25, 2023.