AmFIRST REIT sells Menara AmBank for RM331mil, hunting for industrial and healthcare assets - its best performer is a hypermall in Bukit Mertajam

AmFIRST REIT has spent a decade going nowhere, no acquisition since it bought Mydin Hypermall in Bukit Mertajam, a unit price stuck around 35 sen against a net asset value of RM1.21, and dividends thinned by an office portfolio yielding less than its borrowing cost. In a Cover Story interview with The Edge’s City & Country, its chairman and CEO laid out the turnaround: sell Menara AmBank for RM331 million, cut gearing from 46.6% to 33.9%, and use the headroom to buy into “hospitals, industrial or education”.

The REIT’s only Penang asset is already its best-performing one. And a listed trust with fresh borrowing capacity and an explicit appetite for industrial property has just joined the list of buyers for mainland assets.

The Menara AmBank sale

AmFIRST REIT signed a conditional sale and purchase agreement on 8 June 2026 to sell its 46-storey Kuala Lumpur headquarters tower to AmBank (M) Berhad — its own sponsor, which holds 26.73% of the REIT’s units, making this a related-party transaction. The circular went out on 4 September and unitholders vote on 21 September.

• Property: freehold, Geran 52468, Lot 140, Section 44, Kuala Lumpur — 46 storeys plus seven levels of car park, 453,419 sq ft net lettable area, 557 bays, completed 1997
• Price: RM331 million cash, a 0.61% premium to Rahim & Co’s RM329 million valuation at 31 March 2026 and above the audited book value of RM328.75 million
• Derived: RM730 per sq ft of net lettable area
• Occupancy: 77.8%, with AmBank itself taking about 66% of the building — 85% of the let space — and occupancy below 75% every year from 2021 to 2025
• Income: RM22.22 million rent and RM12.13 million net property income in FY2026 — a 3.7% net yield on the sale price, below the REIT’s 4.09% weighted cost of debt. Gross rent and net income have shrunk at 1.2% and 2.9% a year respectively over ten years
• What it earned the REIT: bought at listing in December 2006 for RM230.2 million, so a 44% gain over nearly 20 years — about 1.9% a year. The REIT puts the accounting gain at roughly RM51.1 million
• Use of proceeds: about RM225 million redeems the loans secured on the tower, RM95 million pays down revolving credit, RM11 million covers costs. Borrowings drop from RM767.6 million to RM447.6 million, saving about RM3.92 million a year in interest
• Completion: expected in the fourth quarter of 2026

CEO Chong Hong Chuon’s logic is blunt: the tower’s yield has always sat below the borrowing cost, so it was a “negative spread carry asset”. Sell it, pay down debt, and the numbers improve on their own. On a pro forma basis the REIT says FY2026 distribution per unit would have been 3.24 sen instead of 2.87 sen — a 9.3% yield at the current 35 sen unit price.

Penang story: Mydin Hypermall, Bukit Mertajam

The REIT’s last acquisition, and the one its chairman says has been impossible to follow because the unit price kept falling, is the Mydin wholesale hypermall on Jalan Baru, Bukit Mertajam. From the REIT’s FY2026 annual report:

• Title: Geran 173212, Lot 10413, Mukim 6, Seberang Perai Tengah — freehold, subject to a first-party legal charge
• Building: three-storey wholesale hypermarket with a three-storey mezzanine, completed 2015, 536,507 sq ft net lettable area, 1,461 car and 1,118 motorcycle bays
• Bought: 29 January 2016 for RM254.1 million — RM474 per sq ft of lettable area
• Valued: RM283.0 million at 27 February 2026 by Cheston International (RM244.5 million after adjusting for accrued lease receivables) — RM527 per sq ft, up 11% on cost over ten years
• Lease: fully let to Mydin Mohamed Holdings on a 30-year lease running to 2046, fixed rent with a 10% step-up every five years. The second five-year term expired on 31 January 2026 and renewed automatically with the 10% uplift. Weighted lease expiry: 19.85 years
• Income: RM20.9 million revenue and RM20.8 million net property income in FY2026 — the tenant carries the outgoings, so almost every ringgit of rent reaches the REIT. That is an 8.2% net yield on cost and 7.3% on valuation, and about RM3.25 per sq ft a month
• Weight: Mydin is the REIT’s second-largest tenant at 19.0% of total revenue, behind only AmBank Group at 37.6%

Set beside the tower it is selling, the contrast is the whole story. Menara AmBank: 77.8% let, 3.7% yield, income shrinking for a decade. Mydin Bukit Mertajam: 100% let, 8.2% on cost, rent contractually rising every five years for another twenty. Once Menara AmBank leaves the books, the Bukit Mertajam hypermall becomes roughly 22% of the REIT’s remaining RM1.3 billion portfolio by value, up from 17%.

What comes next: industrial, hospitals or education

The portfolio today is 65% office, 25% retail, 5% hotel by the REIT’s own description. Chong says a meaningful new asset class needs to be 20% to 30% of the portfolio, that office falls from 65% to 45% once Menara AmBank is gone, and that the REIT will put about 25% of the sale proceeds — roughly RM83 million — into the first acquisition in the new class.

Chairman Azlan Baqee Abdullah is explicit that the trust will not chase a theme: “You can create a nice storyline about being some kind of specialist REIT, but at the end of the day, it’s about whether it provides a good, long-term yield.” Data centres are being studied but only on yield, not on story. Chong adds that the first purchase in more than ten years “will set our future direction and the standards”, so it will be done “very diligently and selectively”.

The rest of the repositioning

• The Summit Hotel, Subang Jaya — closed December 2025 for a RM45 million two-phase refurbishment, funded by the REIT, with Phase 1 due next month and full completion by January 2027. It reopens as the Portrait Hotel Subang Jaya, operated by Mana-Mana Holdings, a unit of EXSIM Hospitality, on a three-year tenancy with automatic three-plus-three renewals at a base rent of RM600,000 a month plus a revenue share. The REIT tried to sell the hotel first and found no buyer. Derived: RM7.2 million a year is a 16% return on the refurbishment cost alone, or about 5.3% on the hotel’s RM91.8 million valuation plus the capex
• Co-working — International Workplace Group runs Regus centres at Menara Summit and Prima 9 and an HQ centre at Menara AmBank, on a revenue-share management fee. Chong puts the return on investment at over 30%. Another HQ centre is coming to Menara Summit
• Leasing — 180,000 sq ft of new tenancies signed, adding RM6.7 million of income; portfolio occupancy up from 82.5% to 88.7% in FY2026 and 88.3% at 30 June, with Prima 10 in Cyberjaya jumping from 15.8% to 92.1%
• Results — FY2026 (to 31 March) revenue up 5.2% to RM110.26 million, net property income up 5% to RM64.1 million, realised net income up 19.9% to RM19.7 million, distribution 2.87 sen, up 19.6%. First quarter FY2027 realised income up 10% to RM5.64 million; gearing 46.4%, borrowings RM774.1 million, NAV RM1.2115 a unit
• Earlier disposals — the AmBank Group Leadership Centre for RM36 million in 2015 and Menara AmFIRST in Kelana Jaya for RM62 million in 2022, the latter at a loss

*Photos: AmFIRST REIT, via The Edge Malaysia’s City & Country Cover Story of 7 September 2026. Title, area, acquisition and income figures for Mydin Hypermall and Menara AmBank are from AmFIRST REIT’s Annual Report 2026.*