News on Tower REITs and Axis-REIT
There’s two big news on REITs yesterday, the first one was regarding Tower REIT. We had highlighted them before (you can read it here).
The 9.3 million shares issued was oversubscribed 1.48 times at an offer price of RM1.07 per unit. 30% of the new units, which is about 2.79 million units, and the remainder of 6.51 million units were allotted under the public category. Malaysian Issuing House (MIH) said on April 3 that there were 4,327 applications for all the 23.09 million.
According a report by the Edge,
842,000 unsubscribed units reserved initially for eligible directors and employees were also made available to the public.
Under its listing exercise, there were 201.87 million new units in Tower REIT.
The proposed listing date is April 12. Two office buildings in Kuala Lumpur — Menara HLA on Jalan Kia Peng and HP Towers on Jalan Gelenggang, Damansara Heights — will be injected into the trust for RM351 million.
The other news item is regarding Axis-REIT. Earlier postings regarding them can be found here.
They have just bought the entire interest in Lot 24, Jalan Lebuh 1, Kawasan Perusahaan Sultan Sulaiman, North Port, Port Klang from EC Distribution Sdn Bhd for RM10.3 million cash. The managers said that the lot, with its existing building and land, was currently tenanted by MISC Logistics Sdn Bhd. with a monthly rental of RM110,000 which expires on Dec 31, 2007, with an option to renew for another 3 years at the prevailing market rate.
According to the Edge,
The combined gross built-up area of the original buildings and the extensions is 149,248 sq ft. It said the annualised gross rental income was RM1.32 million and the rental rate per month per square foot as at April 3 was 85 sen calculated on a net lettable area of 130,000 sq ft.
…purchase consideration was at a discount to the appraised value of the property of RM13.5 million in a valuation report dated March 6.
Further on, it also noted:
It added that the proposed debt financing would increase the REIT’s gearing ratio to 14.27% of total assets, which is below the gearing limit of 35% prescribed by the Securities Commission.
