KUALA LUMPUR, 11 September 2025 – Al-Salam Real Estate Investment Trust (Al-Salam REIT) has submitted plans to establish a sukuk programme with a nominal limit of up to RM3 billion, aimed at enhancing its financial flexibility for future investment, refinancing, and growth. The Edge Malaysia
The proposed program, filed with the Securities Commission Malaysia on 29 August, includes both senior Islamic medium-term notes and subordinated perpetual Islamic notes under a sukuk wakalah structure. Some issuances may be rated or unrated, depending on arrangements determined before each specific issuance.
Purpose & Strategic Use of Proceeds
Al-Salam REIT said the funds raised from this programme will serve multiple strategic objectives:
- Finance new investment activities to expand or upgrade its real estate portfolio.
- Refinance existing sukuk wakalah obligations that are maturing under the current programme.
- Fund deposits in a sukuk trustee reimbursement account, as required to provide assurances to noteholders.
The programme also allows for sustainable sukuk issuances, aligning with ESG principles for investors seeking socially and environmentally responsible financial products.
Market Reaction & Valuation
The market responded positively: Al-Salam REIT’s units rose 2.5 sen (6.02%) to RM0.44 per unit, boosting the REIT’s total market valuation to about RM255.2 million.
Implications for Al-Salam REIT & REIT Sector
- Increased financial flexibility: With up to RM3 billion in borrowing capacity, Al-Salam REIT is positioning itself to aggressively fund acquisitions or capital enhancements.
- Refinancing risk mitigation: The ability to refinance maturing sukuk helps smooth out cash flow needs and reduce refinancing pressure.
- ESG alignment: The inclusion of sustainable sukuk instruments makes Al-Salam more appealing to global and Islamic institutional investors looking for green financing.
- Investor confidence: The strong share price response suggests markets welcome REITs with proactive capital management strategies.
