AmFIRST REIT proposes RM331 million sale of Menara AmBank

AmFIRST Real Estate Investment Trust (AmFIRST REIT) has proposed the disposal of Menara AmBank, located on Jalan Yap Kwan Seng, to AmBank (M) Berhad for RM331 million. The transaction involves Maybank Trustees Berhad acting as the trustee for AmFIRST REIT.

The divestment is part of a strategy to rationalize and diversify the trust's asset portfolio by disposing of low-yielding assets and recycling capital into higher-yielding acquisitions. The 46-story office building has consistently generated low net operating income (NPI) over the last decade due to prolonged low occupancy rates and moderate rental rates.

AmFIRST REIT noted that the average occupancy rate for the building has been 76.09 percent, with limited prospects for significant yield increases due to structural oversupply in the Kuala Lumpur office market and competition from newer, higher-specification buildings. The asset's NPI has remained below the trust's average borrowing costs. While the asset was originally acquired in December 2006 for RM230.17 million, the disposal is expected to result in a net loss of approximately RM8.72 million.