JS-SEZ to drive Johor industrial demand, lift AME Reit prospects
KUALA LUMPUR: The Johor-Singapore Special Economic Zone (JS-SEZ) is bound to be a supportive tailwind for industrial demand in Johor that will benefit AME Real Estate Investment Trust (Reit), said RHB Research.
The Johor-Singapore Special Economic Zone (JS-SEZ) is set to boost industrial activity in Johor, which will likely improve AME Real Estate Investment Trust (Reit) prospects, according to RHB Research. The firm remains optimistic about AME Reit's future, backed by the JS-SEZ, its robust portfolio fundamentals, steady tenant retention, and potential rental mark-to-market gains.
Currently, AME Reit boasts a full occupancy rate of 100%, promising strong income visibility in the near term. Moreover, the difference between recent achieved rents of RM2.50 per sq ft and the existing passing rents of RM1.80–1.90/sq ft presents additional rental mark-to-market opportunities as leases near expiration.
The research house sees potential inorganic growth for AME Reit, targeting RM100 million in annual acquisitions. This growth is supported by the company's well-established industrial ecosystem and third-party opportunities. Even though AME Reit's borrowings are at a fully floating rate, a 25 basis point rate hike would only have a manageable 1.7% impact on its earnings in FY28, RHB Research estimates.
In the first half of financial year 2027 (FY27), AME Reit's core earnings reached RM23.2 million, accounting for 47% of the firm's full-year forecasts and 50% of consensus estimates. The research house maintains a "Buy" rating on the stock with a lower target price of RM1.92, after adjusting its risk-free rate assumption to 4.0% to reflect the recent rise in Malaysian government securities yields.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
