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Wednesday January 23, 2013
By SHARIDAN M. ALI firstname.lastname@example.org
KUALA LUMPUR: Axis REIT Managers Bhd (ARMB), the manager of Axis Real Estate Investment Trust (Axis REIT), is on a growth path this year.
An allocation of up to RM350mil to boost its portfolio has been earmarked towards this end, with plans to buy more industrial space in high-growth areas such as Johor Baru and Shah Alam.
According to chief executive officer and executive director Datuk Stewart LaBrooy, the total value of assets under negotiation at present was at RM660.6mil spread out in nine different locations.
“We have a placement capacity of about 90.8 million new units to raise approximately RM270mil, which we can leverage on to inject more assets into our portfolio up to the tune of RM350mil.
“This will boost our current portfolio, valued in excess of RM1.5bil, by 20%,” he told reporters after the company's financial results briefing yesterday.
Some of the assets under negotiation are a newly built warehouse in Northport, Port Klang, two factories in Johor, a logistics warehouse in the Port of Tanjung Pelepas and a couple of warehouses in Shah Alam, among others.
The RM350mil allocation would translate into the acquisition of three to four properties from the nine that were under negotiation now.
LaBrooy said the focus was on Johor at the moment by virtue of the southern state being a default choice for companies from Singapore due to the island republic's space constraints.
“Industrial land value in Johor has doubled in the last 12 months. Demand has been going up the roof and this provides us with a big opportunity to look into the assets there.
“What we look for is particularly new stock as well as opportunistic buying if we can get them and transform them into something more interesting.
“This is where we bring value to the funds by repositioning assets, or what we call very good trading buys, or looking at new assets with long leases that we can park into the funds,” he elaborated.
On asset disposal, LaBrooy said the company was always on the lookout for a good sell when the market was high.
“We will look at maturing buildings in our portfolio and if we think a building has fetched the best value, we will dispose it and move on to a fresh new one.
“In our view, nothing lasts forever, and the sale will also provide some capital gains to our shareholders,” he said.
Last month, at its AGM, shareholders had approved the disposal of its Kayangan Depot warehouse in Shah Alam for RM23.6mil.
On the results front, Axis REIT posted a net profit of RM103.1mil for the financial year ended Dec 31, 2012, compared with RM81mil a year ago. This came on the back of an increase in revenue to RM133mil against the RM114.7mil of 2011.
It also announced a final income distribution of 5.6 sen per unit, of which 4.10 sen per unit is taxable and 1.50 sen per unit is non-taxable.
In the fourth quarter of financial year 2012, Axis REIT posted a net profit of RM43.4mil as opposed to RM32mil a year ago on the back of an RM35mil revenue.
In general, the total income distribution per unit for 2012 had increased by 8.1% to 18.6 sen against 2011.
The trust had also recorded a fair value gain for its portfolio of investment properties amounting to RM24.3mil.
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