Sunway REIT to acquire land and buildings for RM91.5mil

PETALING JAYA: Sunway Real Estate Investment Trust (SunREIT) has entered into a conditional sale and purchase agreement with Champion Edge Sdn Bhd to acquire a piece of land and buildings in Shah Alam for RM91.5mil in cash.

“The proposed acquisition is in line with the key investment objective of Sunway REIT Management Sdn Bhd or the manager to continuously pursue an acquisition strategy to acquire and invest in properties that are yield-accretive with the potential to contribute to the long-term growth in SunREIT’s distribution per unit (DPU) or net asset value (NAV) per unit,” said the company in its filing with Bursa Malaysia yesterday.

The buildings that are on the land consist of a two-storey office with an annexed one-storey factory with a mezzanine floor, a three-storey office together with an annexed one-storey warehouse and an integral two-storey office together with a two-storey factory-cum-warehouse with an adjoining mechanical and electrical building and other ancillary buildings.

It said the property is an income-generating property with an unexpired lease term of 18 years.

As such, the manager believes that the proposed acquisition would immediately improve the earnings and the DPU to SunREIT’s unit holders upon the completion of the proposed acquisition.

“SunREIT will benefit from the increase in the enlarged portfolio’s weighted average lease to expiry based on the secured gross rental income.

“The weighted average lease to expiry of SunREIT’s enlarged portfolio will increase to 2.23 years after the completion of the proposed acquisition from 1.98 years as at June 30, 2016.

“SunREIT’s property portfolio size will increase from about RM6.43bil as at June 30, 2016 to RM6.52bil after the proposed acquisition,” it said.