PETALING JAYA: AME Real Estate Investment Trust
’s (AME-REIT) latest acquisition of three under-construction industrial properties from controlling shareholder and sponsor AME Elite Consortium Bhd is seen as another step to leverage on the growing industrial market in Johor.
Senai, Johor-based AME-REIT announced on Monday the acquisition of the three industrial properties from parent AME Elite with a total purchase price of RM100.8mil, with the acquisition of two of the properties expected to be completed by mid-2026 and the third expected to be acquired by the end of 2026.
RHB Research, which has maintained a “buy” call on the stock, has raised the earnings forecast for the REIT and revised the target price by 12% for the shares to RM1.75.
The research house expects the REIT to post RM41.5mil in net profit for the financial year ending March 31, 2026 (FY26) after posting RM36.4mil in FY25 and has projected RM44mil in FY27.
The three properties have been fully-leased for 10 years with built-in rental escalation clauses ranging from 1.91% to 10% for each term.
During the first year, the three properties on an annual basis provide RM7.3mil in gross rental (7.2% gross yield).
“The starting gross yield of 7.2% makes it an accretive acquisition, notwithstanding the built-in rental escalations. We lower our FY25 earnings by 2% and raise our FY27 earnings by 3% to factor in the acquisitions and adjust our cost of borrowing assumptions.
With RM177mil worth of acquisitions still ongoing (RM46mil completed in the fourth quarter of FY25), FY26 is shaping up to be a strong year for the REIT.
There could also be more upside from an upcoming lease renewal for its dormitories in FY26 which makes up 16% of its current gross rental income,” it added. The REIT remains the only Malaysian REIT to have worker dormitories in its portfolio.
