KUALA LUMPUR: AmanahRaya-Kenedix REIT Manager Sdn Bhd, the management company of AmanahRaya Real Estate Investment Trust (AmanahRaya REIT) announced that the sale of the Holiday Villa Beach Resort & Spa Langkawi for RM145 million has been completed.
AmanahRaya REIT and Plenitude Bhd's wholly owned unit, Plenitude Gateway Sdn Bhd had entered into a sale and purchase agreement for the sale of the property on June 28, 2023, to trim its borrowings.
The sale includes a 4-star beach resort hotel with 238 rooms across three parcels of freehold land.
The property, which is currently leased by Langkawi Holiday Villa Sdn Bhd and operated as a Holiday Villa brand, was acquired by the trust at a price of RM55 million on Feb 26, 2007.
The current lease agreement with Langkawi Holiday Villa is for 10 years, starting on July 13, 2016, and ending on July 12, 2026. There is a 10-year option to extend the lease for an additional ten years, starting on the date the current lease expires.
The disposal is in line with the growth strategy of AmanahRaya REIT to unlock and realise higher returns on its investments at a favourable price.
According to AmanahRaya-Kenedix REIT Manager, the transaction will see AmanahRaya REIT recognising a gain on disposal amounting to RM45 million. The gain will be reflected in the financial statement ending Dec 31, 2024, it said.
"Through this divestment, the proceeds can be utilised for new acquisitions, with the objective of moving up the overall yield of our asset portfolio," said the company's managing director, Tunku Rozita Tunku Abdul Malek.
Plenitude said in its June filing that the purchase of the property would be a continuation of the company's strategy to diversify its regional risk in the hospitality industry.
The hotel is ideally situated among tourist attractions like Cenang Plaza, Laman Padi, Underwater World Langkawi, and Cenang Mall.
It is also roughly 20 kilometers from Kuah town, Langkawi's principal administrative and commercial hub.