AL-’AQAR KPJ Real Estate Investment Trust (REIT) expects to attract more investors from the Middle East as its latest financing facility complies with the Gulf Cooperation Council and Malaysian standards.
Kuwait Finance House (Malaysia) Bhd (KFHMB) and AmInvestment Bank Bhd are the lead arrangers for the syndicated ijarah facility of up to RM250mil for Al-’Aqar.
“With these standards in place, it will become a stepping stone for Al-’Aqar to penetrate the Middle East market. Furthermore, Al-’Aqar is the first Islamic REIT to procure such a facility,” Damansara REIT Managers Sdn Bhd board member Datin Paduka Siti Sa’diah Sheikh Bakir said after the signing ceremony for the syndicated ijarah facility yesterday.
She said KPJ Healthcare Bhd was already present in the Middle East as two hospitals in Jeddah were under its management.
“There are definitely plans to find out how to take the strategic path that would benefit the parties involved,” she said.
AmInvestment Bank director and head of debt capital markets Soo Seohan said the mature assets and strong cash flow of Al-’Aqar would be added incentives to attract investors.
The syndicated ijarah facility had received positive response from financiers, indicating that banks were still lending, he said.
Damansara REIT Managers, the manager of Al-’Aqar, will use the RM250mil to partly finance its acquisition of nine real estate assets worth some RM398mil. The balance of RM148mil will be via the issuance of 123 million new Al-’Aqar units at 95 sen each.
The new financing will raise gearing ratio to 45%, which is close to the limit of 50% allowed by the Securities Commission.
Damansara REIT Managers director Kamaruzzaman Abu Kassim said there were no plans currently to issue more new Al-’Aqar units to reduce gearing.
He said the cost of funds for the syndicated ijarah facility was below the conventional fees.
Meanwhile, Siti Sa’diah said of the nine properties to be acquired, two were not hospitals, namely Selesa Hotel and Metropolis Tower.
KPJ currently uses the tower for its nursing training unit, KPJ International College of Nursing and Health Sciences.
Selesa Hotel, on the other hand, was needed as many of KPJ’s Indonesian patients would require lodging for their families during treatment at the hospital in Johor Baru, she said.
The latest new assets will enlarge Al-’Aqar’s portfolio to 20 properties from 11 previously with a combined value of RM1bil compared with RM651.5mil early this year.
Kamaruzzaman said the acquisitions were likely to be completed by mid-year.
Al-’Aqar has declared a final dividend of 8.1 sen per unit for the financial year ended Dec 31, 2008.