Al-Salam REIT to acquire properties from QSR for RM115m


  • Property
  • Monday, 04 Dec 2017

Managing director Datuk Seri Mohamed Azahari Kamil said there were 25 million KFC customers in Malaysia every month, which led to regional revenue growth of between 20% and 30 % last year.

KUALA LUMPUR: AmanahRaya Trustees Bhd, as trustee for Al-Salam REIT, is acquiring 22 properties from several QSR Brands (M) Holdings Bhd units in an all-cash deal of RM115mil.

The vendors of the properties are KFC (Peninsular Malaysia) Sdn Bhd, Kentucky Fried Chicken (Malaysia) Sdn Bhd, KFC (Sabah) Sdn Bhd and SPM Restaurants Sdn Bhd.

AmanahRaya said the proposed acquisitions are conditional upon a leaseback agreement with QSR Stores Sdn Bhd and Pizza Hut Restaurants Sdn Bhd that the properties will be leased for three years with an option to extend up to a period of 15 years, and a further option for renewal.

The proposed acquisitions are deemed related party transactions as state investment company Johor Corp is the ultimate parent of AmanahRaya and the vendors.

The properties comprise 21 restaurants and one warehouse/office that support the F&B operations of the KFC and Pizza Hut fast food outlets.

To fund the proposed acquisition, AmanahRaya intends to raise RM60mil through a proposed placement while the remaining RM55mil will be raised through borrowings. 

The trustee said it expects to issue about 10.89% of the existing approved fund size of Al-Salam REIT to raise the gross proceeds of RM60mil.

AmanahRaya said the proposed acquisitions were expected to be distribution per unit yield accretive, increase Al-Salam REIT's property portfolio and diversify its segmental revenue. 

It added that the REIT will also benefit from the strategic locations of the properties while the lessees are units of QSR, a major tenant of Al-Salam REIT with a proven track record in rental payment.

Al-Salam REIT is also in the process of acquiring Mydin Hypermarket Gong Badak for a cash consideration of RM155mil. 

Post-Mydin acquisition, the REIT's net asset value per unit will decline from RM1.06 to RM1.02 a unit. Its borrowings will increase RM157.6mil to RM504.4mil while its gearing ratio will rise from 35.45 to 45.18. 

Subsequent to the acquisition of the properties from QSR, Al-Salam REIT would have a net asset value of RM1.01 per unit and a gearing ratio of 45.60 with total borrowings of RM559.4mil.

As at 2.40pm, Al-Salam REIT was unchanged at 99.5 sen on very low trading volume.

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