KUALA LUMPUR: AmFirst Property Trust (AMFPT) is proposing to acquire the 22-storey Menara Merais in Petaling Jaya, together with the freehold land on which it sits, for RM57mil cash.

AMFPT's management company, AmProperty Trust Management Bhd (AmPTMB) told Bursa Malaysia the acquisition would help to deliver regular and stable distributions and help it achieve long-term net asset value growth so as to provide unitholders with a competitive rate of return.

It said the acquisition of the office building would contribute to AMFPT's distributable income and further improve its portfolio of properties and tenants mix as well as overall occupancy rate.

The long-term earnings prospect of the 99%-occupied Menara Merais is expected to benefit AMFPT.

''The acquisition will also diversify the geographical location of AMFPT's existing properties which is important to reduce the risk owing to the softening of the property market at certain locations at any time,'' AmPTMB said.

AMFPT intends to finance the acquisition via borrowings.

Upon completion of the acquisition, AMFPT's gearing ratio will be 22% based on the total amount of its audited assets of RM201.4mil as at Dec 31, 2004 and the RM57mil to be paid for Menara Merais.

AmPTMB said the acquisition, to be completed by the second quarter of the year, was expected to contribute positively to its long-term earnings.

Menara Merais has a net lettable area of 159,002 sq ft and a rental income of RM5.03mil for the year ended Dec 31, 2004.

AMFPT's properties currently consist of Bangunan AmBank Group and AmBank Group Leadership Centre, both in Kuala Lumpur.

AMFPT recorded a 16% drop in year-on-year pre-tax profit to RM7.9mil for the nine months ended Sept 30, 2005 while revenue was marginally higher at RM14.6mil from RM14.5mil previously.

Source : The Star 4/1/2006