17/12/06 (The Edge Daily)  - The Boustead Group has set up the Al-Hadharah Boustead REIT, the first Islamic oil palm plantation real estate investments trust (REIT), which will acquire plantation assets totalling RM472 million.

Boustead Holdings Bhd said on Dec 18 the assets - eight oil palm estates and two oil mills in Peninsular Malaysia – would be acquired from Boustead.

Lembaga Tabung Angkatan Tentera’s (LTAT) subsidiary, Boustead REIT Managers Sdn Bhd, will manage the REIT.

The statement was issued after the underwriting agreement in Kuala Lumpur. The underwriters are Affin Bank Bhd, Affin Securities Sdn Bhd and Malaysian International Merchant Bankers Bhd.

Under its initial public offering (IPO), Boustead would issue 22 million units to directors, eligible employees and to the public and 198 million units to institutional and selected investors.

 
Lodin (left) shaking hands with Affin Securities chief executive officer Saiful Bahri Zainuddin at the Al-Hadharah Boustead REIT Underwriting Ceremony as officials from both companies look on


Boustead would receive 252 million units as part consideration for the sale of the plantation assets to the fund.

Boustead group managing director Tan Sri Lodin Wok Kamaruddin said the IPO was unique as the corporate exercise involved a Syariah compliant instrument with a plantation REIT.

He said the IPO would provide institutional and retail investors an opportunity to tap into the vast potential in oil palm plantations, especially with the trend of sustained CPO (crude palm oil) prices.

“The Al-Hadharah Boustead REIT may provide a further benefit through an annual profit sharing of net incremental income based on a formula pegged to CPO and fresh fruit bunch prices.

“This profit sharing payment is the first of its kind in the REIT market and may translate into more handsome dividend yields for investors,” he said.

Lodin added there was further upside given the prospect of potential capital appreciation which again may be translated into dividend yields for unit holders.