PETALING JAYA: Axis Real Estate Investment Trust (Axis REIT) is acquiring a 20.75-acre plot of land in Shah Alam for RM120mil.
In a statement yesterday, the company said its trustee, RHB Trustees Bhd, had entered into a sale and purchase agreement with FIW Steel Sdn Bhd to acquire the freehold property within the Bukit Raja Selatan industrial area of Shah Alam.
“First Pacific Valuers Property Consultants Sdn Bhd, in its valuation report dated Jan 25,2021, valued the property at RM121mil, ” said Axis REIT.
It added that the piece of land consists of a single-storey detached warehouse building, two single-storey detached factory buildings, a single storey detached store together with a three-storey office building and ancillary buildings.
“The total lettable area is 326,231 sq ft, ” Axis REIT said, adding that the acquisition is expected to be completed by the first half of this year.
Upon completion of the acquisition, Axis REIT said FIW will be the property’s sole tenant, with a tenancy for one year and an option to renew for another four terms of three months each.
“The monthly rental for the first year will be RM416,666.67 and RM608,333.34 for the renewed terms, ” said Axis REIT.
The acquisition will be funded by bank financing, which will increase Axis REIT’s gearing ratio to 35.4% of its audited total assets as at Dec 31,2020.
Upon completion, the acquisition will contribute positively to the company’s earnings, it said.
“Bukit Raja Selatan Industrial Area is one of the established industrial areas in Shah Alam, where some notable landmarks are located within this area, including Central I-City, Hospital Shah Alam and Universiti Teknologi Mara Shah Alam.”
In the same statement, Axis REIT Managers Bhd chief executive officer and executive director Leong Kit May said the newly acquired property is strategically located in an established industrial area with good highway accessibility and close proximity to Port Klang.
“This property is also situated directly across Axis REIT’s Bukit Raja Distribution Centre.”
“The current lettable area of the property only represents 36% of the total land area and we are of the view that the property has a good redevelopment potential for a warehouse, after taking into consideration, amongst others, the location of the property and the increasing demand for warehousing within Klang Valley.”
Leong said any proposed redevelopment will only be considered post completion of the sale and purchase agreement and after the expiry of tenancy with FIW and its renewal thereof, subject to a further assessment and a detailed feasibility study on the site and proposed redevelopment plan.