Contents :

1.0 INTRODUCTION

On behalf of the Board of Directors of RCE, Malaysian International Merchant Bankers Berhad ("MIMB") wishes to announce that VSB has on 29 April 2005 entered into a conditional Sale and Purchase Agreement ("SPA") with AMDB in respect of the Proposed Acquisition.

2.0 PROPOSED ACQUISITION

2.1 Details of the Proposed Acquisition

The Proposed Acquisition involves the acquisition by VSB of 29,064,452 Acquisition Units representing approximately 21% of the total units in AMFPT from AMDB for a cash consideration of RM31,970,897.20 The Proposed Acquisition will be funded through internally generated funds and/or bank borrowings of RCE.

The Acquisition Units shall be acquired free from all claims, charges, liens, encumbrances and equities whatsoever together with all rights attached thereto and all dividends, rights and distributions declared paid or made in respect thereof as at the completion date of the SPA, subject to the conditions contained in the SPA. There is no liability to be assumed by VSB arising from the Proposed Acquisition.

2.2 Brief Information on AMFPT

AMFPT was constituted pursuant to the execution of a Trust Deed dated 16 March 1989. It was the first property trust listed on Bursa Malaysia Securities Berhad ("Bursa Securities"). Its authorized unitholders capital is RM1,000,000,000 comprising 1,000,000,000 units, of which 138,400,225 units representing a capital of RM138,545,827 have been issued and fully paid-up as at 31 March 2005. The principal activity of AMFPT is the acquisition and investment of prime properties in major growth areas in Malaysia, particularly in Kuala Lumpur.

Based on the audited accounts of AMFPT for the financial year ended 31 December 2004, the total investments amounted to RM200.83 million. The investments portfolio composition of AMFPT comprise the following:

a) Real properties in commercial buildings in Kuala Lumpur of RM189.00 million representing approximately 94.11% of the total investments. The information of the commercial properties is as follows:

Name of Commercial Properties	Description of Properties	Age of Properties	Tenure of Properties	Net Book Value as at 31 December 2004 (RM)
Bangunan AmBank Group	26-storey office tower with 3 basement levels located along Jalan Raja Chulan and at the junction with Jalan P. Ramlee, Kuala Lumpur.	19 years old as at 31 December 2004	Leasehold, expiring on 3 June 2084	170 million
AmBank Group Leadership Centre	14-storey office tower with 3 levels of car parks located at Jalan Punchak, Kuala Lumpur	24 years old as at 31 December 2004	Freehold	19 million

b) Real property-related assets of RM0.18 million representing approximately 0.09% of the total investment, consisting of quoted securities which are listed in the Property Sector of Bursa Securities;

c) Non-real property assets of RM6.12 million representing approximately 3.05% of the total investment, consisting of quoted securities which are listed on sectors other than the Property Sector of Bursa Securities;

d) Cash, bank balances and cash deposits in financial institutions consisting of RM5.53 million representing approximately 2.7% of the total investment.


2.3 Salient Financial Information of AMFPT

Details of the financial information of AMFPT for the past five (5) financial years ended 31 December 2004 are as follows:

Financial Year Ended 31 December	2004 RM000	2003 RM000	2002 RM000	2001 RM000	2000 RM000
Gross rental income	19,291	18,904	18,175	17,893	19,559
Income before taxation	12,449	10,395	10,425	11,070	4,325
Taxation	(3,233)	(2,575)	(2,911)	(3,064)	(3,019)
Income after tax for the year	9,216	7,820	7,514	8,006	1,306
Net distribution to unitholders	7,450	7,282	6,984	6,481	7,734
Gross distribution per unit (%)	7.5	7.0	7.0	6.5	7.0
Number of Units (000)	138,400	138,400	138,400	138,400	138,400
Income after tax per Unit (sen)	6.66	5.65	5.43	5.78	0.94
Unitholders Funds	194,930	192,778	181,941	181,682	176,509
Net Asset Value per Unit (RM)	1.38	1.37	1.29	1.29	1.28

2.4 Brief information on the Vendor

AMDB was incorporated in Malaysia on 29 December 1965 and was listed on the Main Board of Bursa Securities on 28 November 1972. The principal activity of AMDB is the manufacturing of textile products and investment holding and its subsidiary companies are principally involved in property development, investment and management, tour and travel agency, restaurant operation, construction, electrical and power engineering construction and financial services.

AMDB has an authorized share capital of RM500,000,000 divided into 1,000,000,000 ordinary shares of RM0.50 each, of which 802,846,256 ordinary shares of RM0.50 each have been issued and fully paid up as at 31 March 2005.

AMDBs cost and date of investment in the Acquisition Units are set out below:

Vendor	Number of Acquisition Units	Date of Investment	Cost of Investment (RM)
AMDB	29,064,452	28 September 1989	29,064,452

2.5 Brief Information on VSB

VSB was incorporated in Malaysia on 12 April 1986 under the Companies Act, 1965. VSBs principal activity is property investment. As at 31 March 2005, VSB has an authorized share capital of RM25,000 divided into 25,000 ordinary shares of RM1.00 each of which 2 ordinary shares of RM1.00 each have been issued and fully paid-up.

VSB is a wholly owned subsidiary of Taifab Sdn Bhd, which in turn is a wholly-owned subsidiary of RCE. Presently, VSB holds 29,199,074 units in AMFPT, representing 21.1% of the total units in AMFPT.

2.6 Basis of Arriving at the Purchase Consideration of the Acquisition Units

The purchase consideration for the Proposed Acquisition amounting to RM31,970,897.20 was arrived at on a "willing buyer willing seller" basis negotiated between VSB and AMDB based on RM1.10 per unit after taking into consideration AMFPTs five (5) days weighted average market price of AMFPT up to 28 April 2005 of approximately RM1.10 per unit and the net asset value of AMFPT which stood at RM1.40 per unit as at 31 March 2005.

2.7 Salient Terms of the SPA

Satisfaction Of The Purchase Consideration

The purchase price of RM31,970,897.20 for the Units shall be satisfied in the following manner:

a) on the day of execution of the SPA by the parties, VSB shall pay to AMDB the sum equivalent to 10% of the Purchase Price as deposit and part payment of the Purchase Price.; and

b) subject to the fulfilment of the conditions precedent in Section 7.0 of this announcement, on the Delivery Date, VSB shall pay the balance purchase price to VSBs stockbrokers as stakeholders to hold and deal with in accordance with the terms of the SPA provided that AMDB shall have executed all documents and done all things necessary to enable the transfer of the Units to VSB free from all liens, charges and encumbrances and with full legal and beneficial title and with all rights attaching thereto (including all dividends and distributions declared in respect thereof) with effect from the date of the Completion Date of the SPA.

c) In the event that AMDB shall fail to execute all documents and do all things necessary to enable the transfer of the Units to VSB free from all liens, charges and encumbrances and with full legal and beneficial title and with all rights attaching thereto (including all dividends and distributions declared in respect thereof) with effect from the Completion Date by the Delivery Date, VSB shall be entitled to withhold payment to AMDB of the balance purchase price or any part thereof by the Delivery Date and VSB shall not be required to pay to AMDB the unpaid amount of the balance purchase price until and unless AMDB shall have executed all documents and done all things necessary to enable the transfer of the Units to VSB free from all liens, charges and encumbrances and with full legal and beneficial title and with all rights attaching thereto (including all dividends and distributions declared in respect thereof) with effect from the Completion Date.

Notes:

(1) The Delivery Date is the date which falls at least seven (7) market days after and not more than 30 days after the date where the last of the condition precedent is fulfilled, or as the case may be, the date for execution of the direct business transaction proposed to, and agreed by Bursa Securities.

(2) The Completion Date is a date which falls three (3) business days after the Delivery Date.

3.0 RATIONALE OF THE PROPOSED ACQUISITION

The Board of Directors of RCE is continually striving to enhance the RCE Groups earnings base by diversifying into new investments which will give a reasonable return with acceptable risk profile.

The Proposed Acquisition is expected to provide the RCE Group with a steady income stream based on a proven income distribution track record of AMFPT. AMFPT has been declaring gross income distribution of 6.5% per annum to 7.5% per annum for the past five (5) years.

4.0 FINANCIAL EFFECTS OF THE PROPOSED ACQUISITION

4.1 Share Capital and Substantial Shareholders Shareholding

The Proposed Acquisition will not have any effect on the share capital and the RCEs substantial shareholders shareholdings as the Proposed Acquisition does not involve the issuance of new RCE shares.

4.2 Earnings

Based on the track record of AMFPTs income distribution, the Proposed Acquisition is expected to contribute to the earnings per share of the RCE Group for the financial year ending 31 March 2006.

4.3 Net Tangible Assets

The Proposed Acquisition is not expected to have any effect on the consolidated net tangible assets of the RCE Group.

5.0 RISK FACTORS

The Board of Directors of RCE does not foresee any unusual risk factors associated with the Proposed Acquisition except for the general economic risks, market risks, transaction risks, financial risks, investment risks and business risks commonly associated with real property and quoted securities.

There can be no assurance that any adverse developments in such risk factors would not adversely affect the performance and financial position of the RCE Group in the future.

6.0 INDUSTRY OVERVIEW AND PROSPECT

Overview of the Klang Valley Office Property Market

A total of 1.0 million square feet (sq.ft.) of office space entered the Klang Valley office market in 2004 and therefore increased the total supply of office space to 66.2 million sq.ft. Annual take-up of office space also increased to approximately 1.9 million sq.ft. compared with 1.4 million sq. ft in 2003. Consequently, the overall occupancy rate improved from 77% in the previous year to 82% in 2004. Rental rates and capital values for prime office buildings remained unchanged at previous years levels of between RM2.25 per square feet (p.s.f.) and RM4.80 p.s.f. per month and between RM275 p.s.f. and RM550 p.s.f. respectively. For non-prime buildings, the rental rates and capital values ranged between RM1.20 per month and RM2.60 per month and between RM145 p.s.f. and RM400 p.s.f. respectively.

(Source: AMFPT Annual Report 2004)

Property Trust Industry

The investment management industry in Malaysia continued to expand and sustain its growth momentum in 2004. As at 31 December 2004, the total funds managed by fund management companies in Malaysia increased by 20% to RM114.13 billion compared to 2003.
(Source: Securities Commission Annual Report 2004).

The Malaysian government has also been promoting the development of Real Estate Investment Trusts (REITS) through the Budget 2004 by exempting the real property gains tax on gains from disposal of property by individual or company to these funds and exempting stamp duty on instruments of transfer of real property from individual or company to these funds.

In 2004, the Securities Commission continued to work towards introducing a more flexible regulatory environment to foster the development of REITs. Reflective of these efforts, the government had announced in Budget 2005 a more attractive tax treatment for REITs, which included tax exemption on income distributed to its unit holders and tax credits for income taxed and subsequently distributed. (Source: Securities Commission Annual Report 2004)

These recent developments are expected to spur greater interests in real property trust, such as AMFPT.

7.0 APPROVALS REQUIRED

The Proposed Acquisition is conditional upon the following approvals being obtained :

(a) Shareholders of RCE in an extraordinary general meeting (EGM) for the Proposed Acquisition;

(b) Shareholders of AMDB in an EGM for the sale of the Acquisition Units;

(c) Foreign Investment Committee, if required; and

(d) Any other relevant authorities/parties.


8.0 DIRECTORS AND/OR SUBSTANTIAL SHAREHOLDERS AND/OR PERSONS CONNECTED WITH A DIRECTOR OR SUBSTANTIAL SHAREHOLDERS INTERESTS

Tan Sri Dato Azman Hashim ("TSDAH") is the non-Executive Chairman of RCE and Chairman of AMDB. He is also a
substantial shareholder of RCE and AMDB via his direct and indirect shareholdings in Arab-Malaysian Corporation Berhad
("AMCORP"), a substantial shareholder of RCE and AMDB. AMCORP effectively holds a 41.4% equity stake in RCE via its
wholly-owned subsidiary, Cempaka Empayar Sdn Bhd as at 31 March 2005. AMCORP also holds a 44.1% equity stake and
RM75.9 million Irredeemable Convertible Unsecured Loan Stocks 2003/2010 in AMDB.

Encik Azmi Hashim ("AH") is the non-Executive Vice Chairman of RCE and the Chief Executive Officer of AMDB. He is also a person connected to TSDAH as they are brothers. AH has a negligible direct shareholding in RCE and AMDB as at 31 March 2005.

Puan Shalina Azman ("SA") is a non-Executive Director of RCE and the daughter of TSDAH.

TSDAH, AH and SA are deemed interested in the Proposed Acquisition and have abstained and will continue to abstain from all deliberations and voting in relation to the Proposed Acquisition.

Save as disclosed, as far as the Board is aware, none of the other directors or substantial shareholders of the Company or any persons connected with such a director or substantial shareholder have any interest, direct or indirect, in the Proposed Acquisition.


9.0 DIRECTORS STATEMENT

After taking into consideration all aspects of the Proposed Acquisition, the Board of Directors of RCE (save for the interested Directors as mentioned in Section 8.0 above), is of the opinion that the Proposed Acquisition is fair and reasonable and is in the best interest of RCE Group.


10.0 ADVISER AND INDEPENDENT ADVISER

MIMB has been appointed as the Main Adviser of RCE in relation to the Proposed Acquisition. As the Proposed Acquisition is deemed to be a related party transaction as defined under paragraph 10.08 of Chapter 10 of the Listing Requirements of Bursa Securities, Avenue Securities Sdn. Bhd has been appointed as the Independent Adviser to advise the independent directors and minority shareholders of RCE on the fairness and reasonableness of the Proposed Acquisition.

11.0 ESTIMATED TIME FRAME FOR COMPLETION OF THE PROPOSED ACQUISITION

Barring any unforeseen circumstances, the Proposed Acquisition is expected to be completed by the fourth (4th) quarter of the calendar year 2005.

12.0 DOCUMENTS AVAILABLE FOR INSPECTION

The SPA relating to the Proposed Acquisition will be available for inspection at the registered office of RCE situated at 1st Floor, Lot 271, Jalan Dua, Off Jalan Chan Sow Lin, 55200 Kuala Lumpur during normal office hours from Mondays to Fridays (except public holidays) for a period of three (3) months from the date of this announcement.

This announcement is dated 29 April 2005

Query Letter Contents :