Industrial Property Loans

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Cagamas also purchases industrial property loans from the financial institutions. An industrial property loan is defined as a loan granted for the purpose of financing or refinancing the purchase, construction or renovation of a factory, warehouse or industrial complex. Cagamas purchases industrial property loans in the same manner as for the purchase of conventional housing loans, except for the following:

  • Sale of industrial property loans are subject to compulsory replacement i.e. the selling institutions must offer eligible loans of an equivalent value to replace loans which are repurchased during the contracted review period.
  • Proceeds obtained from the sale of industrial property loans are exempted from the liquidity requirement but are subject to 50% of the statutory reserve requirement.

Eligibility Criteria of Industrial Property Loans

To be eligible for sale to Cagamas, the industrial property loans must:

  • be for financing or refinancing the purchase, construction or renovation of industrial properties;
  • be fully disbursed;
  • not be more than 1 month in arrear at the time of sale;
  • have a remaining life which expires on or after the Review Date;
  • have a book balance less unearned interest not exceeding RM20 million per loan;
  • be secured by a first charge or assignment of rights over the mortgaged property; and
  • comply with other criteria as specified in the Cagamas Mortgage Guide (Commercial and Industrial Property Loans)