UDA considering REIT

From the Business Times:

PROPERTY and leisure group UDA Holdings Bhd said it is considering a plan to raise up to RM500 million by selling shares through a real estate investment trust (REIT) in two years, as it looks at ways of unlocking value from its property assets.

UDA, a unit of the Minister of Finance Inc, plans to list a retail REIT in Malaysia, which would include BB Plaza in Kuala Lumpur, Greentown Mall in Ipoh and Plaza Angsana in Johor Baru, managing director Datuk Jaafar Abu Hassan said.

"We are considering (to raise money through) a REIT, but the plan is subject to stakeholders' views and opinions," Jaafar told Business Times yesterday.

The group will undertake a detailed study before it embarks on the plan.

UDA is targeting RM400 million in revenue this year and to maintain its 2008 net profit.

For fiscal year 2008, UDA posted a net profit of RM28.8 million on revenue of RM313.3 million.

Jaafar attributed the higher revenue to its 14 on-going projects in the Klang Valley, Penang, Johor and Pahang, worth a combined RM900 million.

"We will launch more projects this year. The business has to move despite the turmoil," Jaafar said.

A lot of property holding companies will find that the recession will take longer than anyone expects and that it would be wise to take opportunities to monetize assets so they don't face a cash crunch a few years down the road. The prices the company may get for listing may not be so good, but at least the bond holders will find it harder to jack up the rates on bond refinancing day, especially if the company has cash.