Malaysia-listed industrial REIT, Atrium REIT, announced on 8 January that it will be undertaking an asset enhancement initiative (AEI) on its property located at Lot 7A, Persiaran Jubli Perak, Shah Alam.
The property, known as Atrium Shah Alam 2, is slated to undergo upgrading and refurbishment works that includes replacement of the whole warehouse floor slab, roof, lighting system and sheet piling works at the rear boundary of the property.
“The sheet piling works are necessary to prevent the soil/earth beneath the warehouse floor slab to be drawn out gradually causing the said floor slab to undulate and the rear driveway to settle”, said the REIT in a filing with Bursa Malaysia.
“The total contract sum for the AEI is approximately MYR15.4 million, excluding Goods and Services Tax”, the filing added. The AEI is targeted to begin in January 2016 and targeted for completion by October in the same year.
The cost of the AEI will be financed via bank borrowings and internal funds, said the REIT, adding that this is expected to increase its bank borrowings from MYR59.6million to MYR72.4million. As a result, gearing ratio will increase from 25.06% to 30.45% based on the total assets as at 30 September 2015.
“The earnings of Atrium REIT are expected to be affected during the period of the AEI. Upon completion of the AEI, the property is expected to contribute positively to the earnings of Atrium REIT and also enhances the commercial value of the property”, said the REIT in its filing.
Units of Atrium REIT are last closed on the Bursa Malaysia at MRY1.10.