PETALING JAYA: Axis-REIT Managers Bhd has proposed to acquire a logistics warehouse in Johor Bahru for a cash consideration of RM32mil from Venice Tulip Sdn Bhd.
The manager of Axis Real Estate Investment Trust (Axis REIT) said the property is built upon a leasehold land located within Kawasan Perindustrian Pasir Gudang in Johor.
It said the property is to be acquired free from encumbrances but subject to the terms and conditions stipulated in the sale and purchase agreement.
The property, comprising one block of single-storey warehouse with a mezzanine floor, and three blocks of single storey warehouse, comes with a net lettable area of approximately 276,000 square feet. The property had an occupancy rate of 100% as at Oct 25.
The property has a 30-year lease interest expiring on Sept 16, 2051.
“The proposed acquisition of the property will be funded by existing bank financing of Axis-REIT,” the group said.
“The proposed acquisition of the property is in line with the fund’s investment objectives and its growth strategy to provide the unitholders with stable income distribution and to achieve growth in the net asset value per unit of Axis-REIT, by acquiring high quality, earnings accretive properties with strong recurring rental income,” it added.
The proposed acquisition would be accretive to Axis-REIT’s distributable income.
“Furthermore, the proposed acquisition of the property would enable Axis-REIT to strengthen its portfolio of industrial properties and is expected to benefit the fund in the long term,” it said.
The proposed acquisition of the property is expected to be completed by the first half of 2022. Axis-REIT’s net property income rose 9.3% to 53.43mil in the second quarter ended June 30, 2021 from RM48.90mil a year ago.
This was due to contributions from newly acquired properties and commencement of new tenancies at Axis industrial facility in Rawang and the D8 logistics warehouse.
The industrial REIT segment appeared to be the least affected during the Covid-19 lockdown, as most manufacturing businesses had been allowed to operate.
Kenanga Research in a recent report said the industrial REIT segment remained a safe haven, as businesses within the industrial sector have been faring well.
The research house said it favoured Axis- REIT for its robust resilience during the pandemic. “The group is possibly the only REIT under our coverage confident of positive reversions and downsides are limited with minimal expiries at 18%.
“Fundamentally, the group is actively acquiring numerous bite-sized industrial assets, targeting RM135mil for now, supported by its low gearing of 0.33 times which could potentially accrete up to 5% additional earnings in its financial year 2021.”