YTL Reit entered into a conditional sale and purchase agreement with Hotel 25 Sdn Bhd, an indirect wholly-owned subsidiary of YTL Corporation Berhad, for the acquisition of Hotel Stripes Kuala Lumpur Autograph Collection for a total cash consideration of RM138 million.
Upon acquisition, YTL Reit will lease the hotel to the vendor under a lease agreement for a lease period of fifteen years with an option granted to the Vendor to renew for a further term of fifteen years.
The Reit manager said the proposed acquisition was in line with the investment objective to continuously pursue the strategy to acquire and invest in high-quality hospitality properties in Malaysia and internationally with a view to provide long-term and sustainable income distribution to unitholders and achieve long-term growth in the net asset value per unit
Upon completion of the Proposed Acquisition, the Lease Agreement will provide YTL REIT with fixed rental payments from the Lessee with a step-up provision of five percent for every five years. As such, the Proposed Lease is expected to contribute positively to future distributable income and distribution per unit of YTL REIT after taking into consideration,
among others, the additional income received from the lease arrangement and estimated borrowing costs.
