KUALA LUMPUR: RHB research is mildly positive on the Axis REIT's proposed acquisition of a tract of leasehold land in Bayan Lepas Free Industrial Zone Phase 4 and building from ZoomiC Technology (M) Sdn Bhd for RM20.5mil.
The research house said the acquisition has a decent net yield of 8% given the small size of the asset.
"With the acquisition, we revise slightly our FY20F-21F to 1-2%," said RHB.
It maintained its buy call on Axis REIT with a slightly higher target price of RM1.98 from RM1.94 previously.
To recap, Axis REIT's proposed acquisition is about 90,040 sq ft with a net lettable area of 78,024 sq ft, and set to expire in September 2051.
The property is current leased by Pentax Medical (Penang) Sdn Bhd, which is involved in the manufacturing of medical diagnostic preparation.
The monthly rental of the premises is RM137,000 a month for a period of two years from the commencement date of February 2018.
THe acquisition would raise the number of properties owned by Axis REIT to 47 from 46, including the recent purcahse of an asset at the Batu Kawan Industrial Park.
RHB noted that Axis REIT's dividend yield of 5% is lower than the REIT sector average but believes it to be fair given its shariah REIT status and the defensive quality of its assets.
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