KUALA LUMPUR: AME Elite Consortium Bhd has received its shareholders' approval for listing its real estate investment trust (AME REIT), which entails the listing of 520.0 million undivided interest on the main market of Bursa Malaysia.

During an extraordinary general meeting today, the company's shareholders also voted in favour of an offering of 254.8 million units, representing 49.0 per cent of the total 520 million units in AME REIT.

Group managing director Kelvin Lee Chai said the company is now a step closer to finalising the listing of AME REIT on Bursa Malaysia in the second half of 2022, which will unlock the value of its industrial and industrial-related assets.

"AME REIT will be the main vehicle representing the property investment activity for the company upon its debut on the main market.

"Thus, we will benefit from a symbiotic relationship, as AME can undertake future development projects with optimised capital efficiency, while AME REIT will stand to secure a strong portfolio of industrial and industrial-related properties," he said in a statement today.

At an illustrative offer price of RM1 per unit, AME is estimated to potentially raise RM254.8 million in proceeds from the listing of AME REIT.

Of the proceeds to be raised, RM105.0 million will be used to repay borrowings, RM4.5 million for expenses relating to establishing the REIT, and the balance RM145.3 million for future industrial property development and investment projects, including land acquisitions and joint ventures.

The offering comprises up to 156.6 million restricted offer for sale (ROFS) units to entitled AME shareholders based on one ROFS unit for every five ordinary shares held in AME on the entitlement date.

Another 7.8 million units will be allocated to eligible employees and directors of AME and subsidiaries, and 10.4 million units to the Malaysian public.

Approximately 80.0 million units will be offered to Bumiputera investors approved by the Ministry of International Trade and Industry, as well as institutional investors and selected investors.

AME shareholders had also approved the disposal of 31 industrial properties and three industrial-related properties from AME to AME REIT for RM557.0 million, to be satisfied via the proposed issuance of 520 million units in AME REIT and cash consideration of RM37 million.

AME REIT is an Islamic REIT that will have an initial portfolio of 31 industrial properties with ongoing leases and tenancies to various local and foreign companies, as well as three workers' dormitories that mainly cater to the workers of AME's industrial park tenants.

As of March 31, 2022, the average occupancy rates of the industrial properties and workers dormitories stood at 97.1 per cent and 100 per cent, respectively.

"With the high occupancy rate of the industrial properties in AME REIT's portfolio, we are confident that AME REIT will be able to provide its unitholders with a stable and growing distribution of income in addition to any potential capital appreciation on their investments," said Lee.

The listing of AME REIT is expected to be completed by the third quarter of 2022.