AmFirst REIT unit holders approve RM331mil Menara Ambank sale

AmFIRST Real Estate Investment Trust (AmFIRST REIT) unit holders have unanimously approved the sale of Menara AmBank for RM331 million, clearing the path for the REIT to explore new acquisitions, such as hospital-related properties. This move will reduce AmFIRST REIT's gearing ratio from 46% to 33%, enhancing its financial health for diversification initiatives.

Following the AGM and EGM, AmFIRST REIT's CEO Chong Hong Chuon stated that their focus will shift towards portfolio diversification. The company has been actively scouting investment opportunities in various sectors, including hospital-related assets, which it considers defensive with long-term leases and strong tenants. The office component of AmFIRST REIT's portfolio will decrease to 45% from 62%, allowing for a more diverse asset mix.

Potential acquisitions could yield additional earnings, especially if they offer six to seven% returns against borrowing costs of approximately four%. The proposed sale is expected to conclude in the final quarter of 2026. AmFIRST REIT's management expressed hope for a more favorable tax structure in Budget 2027, aiming to eliminate the 10% withholding tax on REIT distributions.

The outlook for the office property segment appears promising, with increased inquiries since the pandemic as businesses return to physical offices. The retail segment also shows positive momentum, while the hospitality sector continues to receive encouraging demand.