BURSA ANNOUCEMENTS

Date : 31 March 2011

TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS): NON RELATED PARTY TRANSACTIONS

SUNWAY REAL ESTATE INVESTMENT TRUST

TypeAnnouncement
SubjectTRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS)
NON RELATED PARTY TRANSACTIONS
DescriptionSUNWAY REAL ESTATE INVESTMENT TRUST ("SUNREIT")
- PROPOSED ACQUISITION BY SUNREIT OF PUTRA PLACE (“THE PROPERTY”) VIA PUBLIC AUCTION FOR A TOTAL CASH CONSIDERATION OF RM513,945,000.00 (“PROPOSED ACQUISITION”)
1. INTRODUCTION
    The Board of Directors of Sunway REIT Management Sdn Bhd (“the Manager”), the manager for SUNREIT, wishes to announce that OSK Trustees Berhad, the trustee for SUNREIT (“the Trustee”) on behalf of SUNREIT and with the assistance of the Manager was successful in bidding for the Property at a public auction on 30 March 2011. The Trustee had on even date, signed a Memorandum of Sale in relation to the Proposed Acquisition on behalf of SUNREIT.
1.1 Proposed Acquisition
      SUNREIT was successful in bidding for the Property at a public auction for a total cash consideration of RM513,945,000.00 (“Purchase Price”). The Property was auctioned pursuant to an order of sale obtained by Commerce International Merchant Bankers Berhad (“CIMB”) from the High Court of Malaya in Kuala Lumpur (“High Court”) pursuant to a charge granted by Metroplex Holdings Sdn Bhd in favour of CIMB.

      The Property is to be acquired subject to the terms and conditions as stipulated in the conditions of sale in the Memorandum of Sale dated 30 March 2011 made between the Trustee and the Senior Assistant Registrar of the High Court (“Conditions of Sale”).
      1.2 Information on the Property

        The Property is a mixed-use development comprising a shopping mall, hotel and office known as “Putra Place” located at Jalan Putra, Kuala Lumpur. Putra Place is strategically located in Kuala Lumpur’s commercial district, across from the Putra World Trade Centre (PWTC). It is easily accessible via major highways and well served by public transportation such as the STAR Light Rail Transit (LRT) and KTM Commuter Train with the respective train stations located close by. The Hentian Putra bus station that caters to coaches plying the East Coast routes is within walking distance. Putra Place’s catchments include the prestigious and exclusive residential development at Bukit Tunku and Taman Duta.

        The details of the Property are as follows:-


        DescriptionThe Property comprises:
        • An 8-level podium retail/shopping complex known as “The Mall”
        • An office tower known as “100 Putra Place” (from 10th to 33rd floors)
        • A 25-storey 5-star rated hotel (11th to 21st floors), service apartments (from 22nd to 34th floors) and penthouses (from 34th to 35th floors) known as “The Legend”
        • 1,323 car parking bays located at Basements 1 and 2 and from 5th to 8th floor
        Title detailsGrant No. 10012, Lot No. 38, Section 51, Town and District of Kuala Lumpur, State of Federal Territory of Kuala Lumpur
        TenureFreehold
        Land areaApproximately 17,988 square metres (193,621 square feet)

      2. DETAILS OF THE PROPOSED ACQUISITION
        2.1 Salient terms and conditions of the Conditions of Sale
          (a) To pay a deposit of 10% of the reserve price fixed for the Property prior to the bidding. The reserve price was RM513,945,000.00.
          (b) The balance of the Purchase Price must be paid within 120 days from the date of the sale, failing which the deposit of 10% of the reserve price will be forfeited.
          (c)The settlement date cannot be extended under any circumstances.
          (d) Upon the final fall of the hammer, the Property will be at the responsibility of the buyer.
          (e) Within 14 days after settlement of the balance of the Purchase Price, the buyer is entitled to receive the certificate of sale and the title.
          (f) CIMB is not responsible for the delivery and handing over of vacant possession of the Property to the buyer.
          2.2 Basis of the Purchase Price of the Property
            The Purchase Price of RM513,945,000.00 is the reserve price fixed for the Property. The Manager, on behalf of SUNREIT, has obtained an independent valuation from Knight Frank (Proprietor: Ooi & Zaharin Sdn Bhd) dated 17 March 2011 which valued the Property at RM576 million.

            The Proposed Acquisition complies with the requirements of the Securities Commission’s Guidelines on Real Estate Investment Trusts (“REIT Guidelines”).
            2.3 Source of Funds
                The Purchase Price will be financed by internally generated funds and bank borrowings.
                2.4 Liabilities to be assumed by SUNREIT
                    There are no liabilities (including contingent liabilities and guarantees) to be assumed by SUNREIT arising from the Proposed Acquisition, save for the bank borrowings which will be incurred for the Proposed Acquisition as the Manager intends to fund the Purchase Price through internally generated funds and bank borrowings.
                  3. INFORMATION OF THE VENDOR
                    SUNREIT acquired the Property through a public auction pursuant to an order by the High Court to CIMB pursuant to Section 256 of the National Land Code in the matter relating to a charge dated 3 November 1993 granted by Metroplex Holdings Sdn Bhd to Bank Bumiputra Malaysia Berhad (which was subsequently vested in Bank of Commerce (M) Berhad) and registered under Registration No. 17415/93 Volume 732 Folio 27 (“Charge”) and Transfer of Charge Presentation No. 5255/2002 with respect to the transfer of the Charge from Bumiputra-Commerce Bank Berhad to CIMB.

                    As a consequence of acquiring the Property through a public auction, the Manager has no access to specific information relating to Metroplex Holdings Sdn Bhd, the registered proprietor and CIMB, the chargee of the Property. In any case, upon payment of the balance of the Purchase Price to the High Court, the High Court will issue the certificate of sale and upon registration of the certificate of sale with the Land Registry, the title shall pass to and vest in the Trustee on behalf of SUNREIT, freed and discharged from all liabilities under the Charge and any charge subsequent thereto.
                    4. RATIONALE FOR AND PROSPECTS OF THE PROPOSED ACQUISITION
                      The Manager aims to provide the unitholders with exposure to a diverse portfolio of authorised investments that will provide stable cash distributions with the potential for sustainable growth in net asset value per unit via inter-alia, implementation of its acquisition growth strategy. This involves selectively acquiring properties that meet the Manager’s investment criteria that will provide attractive cash flows and yields, as well as opportunities for further revenue growth through asset enhancement.

                      The Proposed Acquisition comprising a shopping mall, hotel and office is in line with the asset class of our asset portfolio, investment objective and strategy and it will be accretive to SUNREIT’s distribution income.

                      The Manager sees enhancement and turnaround opportunities for the Property and plans to undertake major renovation works. Upon completion of this turnaround exercise, the Manager believes that the Property will enjoy upside on capital appreciation as well as improved yield.

                      The Proposed Acquisition will, at the same time provide geographical diversification and enlarge SUNREIT’s portfolio of properties and is expected to benefit SUNREIT in the long term.

                    5. EFFECTS OF THE PROPOSED ACQUISITION
                      5.1 Unit Capital and Substantial Unitholders’ Unitholding
                        The Proposed Acquisition will not have any effect on the total units of SUNREIT in issue and substantial unitholders’ unitholding in SUNREIT as the Purchase Price will be paid entirely in cash, to be sourced from internally generated funds and bank borrowings.
                        5.2 Net Asset Value (“NAV”)
                          The Proposed Acquisition will have no material impact or changes to the unaudited NAV of SUNREIT at the time of completion.
                          5.3 Earnings
                            The Proposed Acquisition is expected to contribute positively to the earnings of SUNREIT for the financial year ending 30 June 2012.

                          6. APPROVALS REQUIRED FOR THE PROPOSED ACQUISITION
                              Pursuant to the REIT Guidelines, the Proposed Acquisition does not require approval from the Securities Commission or the unitholders of SUNREIT.

                            7. INTERESTS OF DIRECTORS OF THE MANAGER AND SUBSTANTIAL UNITHOLDERS OF SUNREIT
                              None of the Directors of the Manager or substantial unitholders of SUNREIT or persons connected with them, has interest, whether direct or indirect, in the Proposed Acquisition.

                            8. STATEMENT BY THE BOARD OF DIRECTORS
                                The Board of Directors of the Manager is of the opinion that the Proposed Acquisition is in the best interests of SUNREIT.

                              9. ESTIMATED TIMEFRAME FOR COMPLETION
                                The Proposed Acquisition is expected to be completed upon the payment of the balance of the Purchase Price, which is payable within 120 days from 30 March 2011.

                              10. DOCUMENTS AVAILABLE FOR INSPECTION

                                The Proclamation of Sale and Memorandum of Sale executed by the Trustee for the Proposed Acquisition are available for inspection at the registered office of the Manager at Level 16, Menara Sunway, Jalan Lagoon Timur, Bandar Sunway, 46150 Petaling Jaya, Selangor and the place of business of the Trustee at 6th Floor, Plaza OSK, Jalan Ampang, 50450 Kuala Lumpur during normal office hours (9.00 a.m. to 6.00 p.m.) from Monday to Friday (except on public holidays) for a period of 3 months from the date of this announcement.

                              This announcement is dated 31 March 2011.


                              Announcement Info

                              Company NameSUNWAY REAL ESTATE INVESTMENT TRUST  
                              Stock Name SUNREIT    
                              Date Announced31 Mar 2011  
                              CategoryGeneral Announcement
                              Reference NoSR-110331-77274

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