KUALA LUMPUR: AmFIRST Real Estate Investment Trust (AmFIRST REIT) is seeking unitholders’ approval for the proposed disposal of Menara AmBank to AmBank (M) Bhd for RM331mil cash.
AmREIT Managers Sdn Bhd, the manager of AmFIRST REIT, said it has issued a circular to unitholders and will convene an extraordinary general meeting (EGM) on Sept 21 to vote on the proposal.
“The proposed disposal forms part of AmFIRST REIT's ongoing portfolio rationalisation and capital recycling strategy aimed at optimising asset performance, enhancing financial flexibility and positioning the Trust for sustainable long-term growth,” AmFIRST REIT said in a statement.
Menara AmBank is a 46-storey office tower in Kuala Lumpur’s Golden Triangle and has been part of the REIT’s portfolio since 2006.
AmFIRST REIT said the property’s net property income yield has remained below the trust’s average borrowing cost in recent years due to prolonged low occupancy and subdued rental rates amid an oversupply of office space in Kuala Lumpur.
Proceeds from the disposal will be used primarily to reduce debt, including the settlement of secured borrowings and partial repayment of outstanding financing facilities.
Upon completion, AmFIRST REIT’s gearing is expected to fall to about 33.9% from 46.6%.
AmREIT Managers chief executive officer Chong Hong Chuon said the transaction would allow the REIT to unlock value from a mature, lower-yielding asset while strengthening its balance sheet.
“Upon completion of the disposal, the proceeds will be utilised primarily for debt reduction, resulting in substantial financing cost savings and a significant reduction in gearing.
“This will strengthen AmFIRST REIT’s financial position and enhanced its flexibility to pursue opportunities that support its portfolio repositioning and diversification strategy toward higher-yielding assets with more resilient income streams, thereby enhancing earnings sustainability and supporting long-term value creation for unitholders."
The board, excluding interested directors, has recommended that unitholders vote in favour of the proposed disposal.
Barring unforeseen circumstances, the transaction is expected to be completed in the fourth quarter of 2026.
