AmFirst REIT’s RM331m Menara AmBank disposal turns unconditional

KUALA LUMPUR, 22 SEPTEMBER 2026 —

AmFIRST Real Estate Investment Trust's proposed RM331 million disposal of Menara AmBank to AmBank (M) Bhd became unconditional on Monday after all conditions precedent were fulfilled, the manager announced in a Bursa Malaysia filing the same day.

The sale and purchase agreement (SPA) took effect on Sept 21, triggering a completion window of three months with an optional one-month extension.

The transaction, structured as a related-party deal because AmBank is a major unitholder of the trust, marks the exit from a 46-storey office tower that has dragged on portfolio occupancy and yield metrics for several years.

Unitholders approved the disposal at an extraordinary general meeting earlier on Monday, with 58.07 million votes representing 96.14% of votes cast in favour of the resolution. The poll result was validated by Deloitte Malaysia Assurance Sdn Bhd, the independent scrutineer appointed by AmREIT Managers Sdn Bhd, the trust's manager.

Interested directors abstained from board deliberations and voting on the transaction, while interested major unitholders — identified in the circular as AmBank and its holding company AMMB Holdings Bhd — and other interested parties were required to abstain from voting on the resolution, in line with related-party transaction governance requirements.

The property comprises the freehold Menara AmBank office tower at No 8, Jalan Yap Kwan Seng, Kuala Lumpur, held under Geran 52468, Lot No 140, Section 44, Town and District of Kuala Lumpur. It includes seven levels of elevated car park, a net lettable area of 453,419 square feet and 557 parking bays.

As at March 31, 2026, the building was 77.8%-occupied and generated rental income of RM22.22 million and net property income of RM12.13 million for the financial year ended on that date. The manager has previously characterised the asset as mature and lower-yielding relative to the trust's broader portfolio.

The RM331 million disposal consideration represents a 0.61% premium to Menara AmBank's appraised market value of RM329 million as at March 31, 2026, while the property's audited net book value stood at RM328.75 million on the same date. AmFIRST REIT expects to record an estimated net loss on disposal of RM8.72 million after accounting for approximately RM10.97 million in estimated transaction expenses.

The manager said the disposal would allow the trust to unlock value from a mature, lower-yielding asset, improve portfolio efficiency and strengthen its financial position, while supporting a repositioning towards higher-yielding assets with more resilient income streams.

Of the proceeds, an estimated RM225 million will be used to redeem Menara AmBank and discharge the existing charges and private caveat over the property. The RM225 million represents the principal outstanding on the relevant Maybank facilities and excludes accrued interest; the final redemption sum will be determined later, with any variation to be adjusted against the amount allocated for partial repayment of bank borrowings.

The circular estimated that settlement of the redemption sum would result in potential annual interest savings of about RM8.99 million, based on interest rates ranging from 3.98% to 4%.

Another RM95.03 million is intended for the partial repayment of revolving credit facilities with AmBank, while RM10.97 million is allocated for disposal-related expenses. The RM95.03 million repayment is expected to generate further annual interest savings of about RM3.92 million, based on an interest rate of 4.1247%. The revolving credit facilities carried an outstanding balance of about RM220.36 million as at the latest practicable date.

On a pro forma basis, the disposal would reduce AmFIRST REIT's gearing to 33.94% from 46.60% as at March 31, 2026, providing significant balance-sheet headroom below the statutory 50% limit.

At a media briefing on Monday, AmFIRST REIT chief executive officer Chong Hong Chuon said Menara AmBank had weighed on the trust's overall portfolio occupancy, with the building's occupancy in the high-70% range. The REIT is targeting an average portfolio occupancy rate of at least 90%, compared with about 88% at end-June, according to The Edge Malaysia.

Chong said about 183,000 square feet of leases signed progressively during FY2026 are expected to make a full-year contribution in FY2027. Rental reversions, a new co-working space and higher car park income from improved occupancy are also expected to support income growth in the coming financial year.

At the same briefing, AmFIRST REIT executives said the Malaysian REIT Managers Association had urged the government to restore the preferential 10% withholding tax on REIT distributions in Budget 2027 and also raise the statutory gearing limit to 60% from 50%, according to The Edge Malaysia. The association's advocacy reflects broader industry efforts to enhance the competitiveness of Malaysian REITs relative to regional peers and to align regulatory frameworks with evolving capital-market practices.

The completion of the SPA will see Maybank Trustees Bhd, acting solely as trustee for AmFIRST REIT, transfer the property to AmBank within the stipulated timeline.