UOA Offers REITs Today
If you read any of the major newspapers today, you would have notice that there was an general offer REITs by UOA to the public at RM1.15 per share.
There was a write-up in the media, and the following are the key points:
- UOA is forecasting a net profit of RM17.98 million for the financial year ending Dec 31, 2006 on expectations of higher rental revenue. This is expected to increase to RM20.21 million in 2007 and RM22.78 million in 2008.
- To achieve this, company was looking at a 10% increase in rental rates, they were still below the market rate. They have also noted that the company would stay focussed on commercial office buildings.
- UOA Holdings has a landbank of 24ha in the Klang Valley. To date, it has developed RM1.5 billion worth of properties. One of it is, of course their flagship Wisma UOA on Jalan Pinang.
- The REIT’s initial investments are the majority parcels in three of the four signature buildings and constructed by UOA Holdings — Wisma UOA Centre, Wisma UOA II and Wisma UOA Damansara. According ti them, these buildings have a high occupancy rate of 86% to 99% that was attributable to its strong tenant-partnership and management.
- Under the listing exercise of the UOA REIT, the UOA Group hopes to raise RM89.7 million, assuming that the 78 million units offered are subscribed at RM1.15 each.
- Of the 78 million units, a total of 10 million units would be offered to the public at RM1.15 per unit and three million units to the eligible employees, directors and associates.
- Over the past five years, Khor added, rental revenue from the assets increased from RM18.4 million to RM24.3 million. Property income almost doubled to RM17.8 million from RM9.3 million.
- The remaining 65 million will be offered to selected investors at an institutional price to be determined by book-building. The final retail price will equal the low of RM1.14 and 97% of the institutional price.
- It is expected to list on the Main Board on Dec 30.
