KUALA LUMPUR: Islamic real estate investment trust (REIT), Al-Salam Real Estate Investment Trust (Al-Salam), is raising RM92.8 million through a proposed private placement for the purpose of working capital funding, capital expenditure and to reduce its bank borrowings.
Damansara REIT Managers Sdn Bhd, the manager of Al-Salam REIT, said the private placement was expected to reduce Al-Salam’s pro-forma financing over total assets ratio to 0.43 times from 0.48 times, assuming RM64.96 million of existing financing is repaid from the proceeds.
“We believe that these initiatives will drive Al-Salam’s earnings per unit growth moving forward,” Damansara REIT Managers chief executive officer Wan Azman Ismail said.
Al-Salam REIT was also expected to be positively impacted, in terms of earnings, from the reduction in Islamic financing costs arising from the recent overnight policy rate cuts, he said.
In addition, he said Al-Salam had the potential to further expand its property portfolio through more acquisitions and tapping into its major unitholder, Johor Corporation’s vast selection of prime assets especially industrial estate assets.
AmInvestment Bank has been appointed as the principal adviser and placement agent for the proposed private placement.
Al-Salam’s portfolio currently stands at RM1.2 billion following the recent acquisition of Mydin Hypermarket Gong Badak in Kuala Terengganu. -Bernama