1.  INTRODUCTION

The Board of Directors (“Board”) of AmREIT Managers Sdn Bhd (“AmREIT” or “the Manager”), the management company of AmFIRST REIT, wishes to announce that Maybank Trustees Berhad (“MTB” or “Trustee”), acting solely in the capacity as trustee for and on behalf of AmFIRST REIT, has entered into a sale and purchase agreement (“SPA”) on 1 July 2022 with Forever Backup Sdn Bhd (“FBSB” or “the Purchaser”) and the shareholders of the FBSB (as the guarantor) for the Proposed Disposal.

1.1  Proposed Disposal

AmFIRST REIT proposed to dispose the Property for a total cash consideration of RM62.0 million (exclusive of sales and services tax) (“Disposal Price”) to the Purchaser.

Pursuant to the Third Restated Deed of Trust dated 12 June 2020 constituting AmFIRST REIT entered between MTB and AmREIT, the Trustee has approved the Proposed Disposal on 14 April 2022.

1.2  Information on the Property

The Property, known as Menara AmFIRST, is a 22-storey office building with 3 levels of basement car parks erected on a freehold land held under H.S.(M) 9104, PT 29649, Mukim Sungai Buloh, District of Petaling, State of Selangor.

Further details of the Property are set out below: -

2.  DETAILS OF THE PROPOSED DISPOSAL

2.1  Salient Terms and Conditions of the SPA

2.1.1  Agreement to sell and to purchase

MTB, acting solely in the capacity as trustee for and on behalf of AmFIRST REIT has agreed to sell and the Purchaser has agreed to purchase, the Property at the Disposal Price free from all encumbrances, subject however to the conditions, category of use and restrictions of title of the Property, expressed or implied, in the issue document of title to the Property, with vacant and/or with legal possession in respect of the part of the Property which is subject to the tenancy agreements, upon the terms and conditions of the SPA.

2.1.2    Agreement to sell and payment of the Disposal Price:

a)    The Disposal Price for the Property of RM62.0 million is payable in the following manner:

i.  upon acceptance of the offer to purchase by the Manager, the Purchaser has paid to MTB’s property agent the sum equivalent to two per centum (2%) of the Purchase Price amounting to RM1,240,000.00 only (“Earnest Deposit”);

ii.  immediately upon execution of the SPA, the Purchaser shall pay to MTB the sum equivalent to eight per centum (8%) of the Purchase Price amounting to RM4,960,000.00 only (“Balance Deposit”) and such Balance Deposit shall be treated as part payment towards the Purchase Price; and

iii.  ninety per centum (90%) of the Purchase Price amounting to RM55,800,000.00 only (“Balance Purchase Price”) to be paid to the Existing Caveat Holder and/or MTB’s solicitors as stakeholders within the Completion Period.

In the event the Purchaser is unable to pay the Balance Purchase Price within the Completion Period, MTB shall automatically grant to the Purchaser a further period of  30 days from the next day following the last day of the Completion Period (“Extended Completion Period”) PROVIDED THAT the Purchaser shall pay to MTB interest on the Balance Purchase Price or part thereof which is outstanding at the rate of eight per cent (8%) per annum calculated on a daily basis (“Late Payment Interest”) from the first day of the Extended Completion Period until the date of receipt of the Balance Purchase Price by MTB’s solicitors as stakeholders. MTB’s solicitors shall be entitled to release to the MTB the Balance Purchase Price together with Late Payment Interest (if any) upon the expiry of fourteen (14) days from the date of the presentation of the memorandum of transfer or the date of which the memorandum of transfer is deemed to have been presented for registration pursuant to the SPA, whichever is earlier, in respect of the said Property provided always that vacant possession and/or legal possession of the Property shall have first been delivered by MTB to the Purchaser in accordance with the terms of the SPA.

2.2  Basis of the Disposal Price

The Disposal Price is arrived at on a willing-buyer willing-seller basis after taking into account the market value of the Property of RM64.6 million as appraised by Rahim & Co International Sdn Bhd, an independent firm of registered valuers, in its valuation report dated 28th March 2022 (Date of Valuation – 17th February 2022 ). The valuation is derived using investment and comparison method of valuation and is above the Disposal Price.

2.3  Liabilities Assumed by the Purchaser

FBSB will not assume any liabilities, including contingent liabilities and guarantees, pursuant to the Proposed Disposal.

3. INFORMATION OF THE PURHCASER

FBSB is a private limited company incorporated in Malaysia under the Companies Act, 2016 on 10 August 2020. Its issued and paid-up capital is RM1,000 comprising of 1,000 ordinary shares.

4. RATIONALE FOR THE PROPOSED DISPOSAL

The Manager opines that considering the age and limited scope for growth of the asset it is opportune to dispose of this asset to repay existing borrowings to optimise the Trust’s gearing level.

5. EFFECTS OF THE PROPOSED DISPOSAL

5.1  Unitholders’ Capital and Substantial Unitholders’ Unitholding

The Proposed Disposal will not have any effect on the total units of AmFIRST REIT in issue and substantial unitholders’ unitholding in AmFIRST REIT, as the Disposal Price will be satisfied entirely in cash.

5.2  Net Asset Value (“NAV”)

There will be no material impact on the NAV of AmFIRST REIT upon the completion of the Proposed Disposal.

5.3  Earnings

The expected net loss on disposal is approximately RM4.93 million arising from the Proposed Disposal and will not have significant impact to the earnings of AmFIRST REIT for the financial year ending 31 March 2023.

6. UTILISATION OF PROCEED FROM THE DISPOSAL

The net proceeds of the Proposed Disposal, after deducting all fees and expenses relating to the Proposed Disposal, will be utilised to repay existing borrowings. The net proceeds are expected to be utilised within 12 months from the date of completion of the Proposed Disposal.

7. PERCENTAGE RATIO

The percentage ratio applicable for a REIT in respect of the Proposed Disposal pursuant to Paragraph 10.02(g)(vi) of the Listing Requirements is approximately 3.7%, computed based on the Disposal Price compared with the latest audited total asset value of AmFIRST REIT as at 31 March 2022.

8. INTERESTS OF DIRECTORS AND MAJOR SHAREHOLDER OF AmREIT AND MAJOR UNITHOLDERS OF AmFIRST REIT

None of the Directors or major shareholders of AmREIT and/or major unitholders of AmFIRST REIT or persons connected with them, has interest, direct or indirect, in the Proposed Disposal.

9. APPROVALS REQUIRED FOR THE PROPOSED DISPOSAL

The Proposed Disposal has been approved by the Trustee on 14 April 2022. It is not subject to the approval of the Unitholders of AmFIRST REIT and any regulatory authorities.

10. DIRECTORS’ OPINION

The Board of Directors of the Manager, having considered all aspects of the Proposed Disposal and after careful deliberation is of the opinion that the Proposed Disposal is in the best interest of AmFIRST REIT.

11. ESTIMATED TIMEFRAME FOR COMPLETION

Barring any unforeseen circumstances, the Proposed Disposal is expected to be completed by third quarter of 2022.

12. DOCUMENTS FOR INSPECTION

Copies of the following documents are available for inspection during normal office hours from Monday to Friday (except on public holidays) at the business address of AmREIT at Penthouse, Menara AmFIRST, No. 1, Jalan 19/3, Petaling Jaya, 46300 Selangor Darul Ehsan, for a period of three (3) months from the date of this announcement:

(i)    The SPA; and

(ii)   The valuation report on the Property dated 28 March 2022.

This announcement is dated 1 July 2022.