Axis-REIT acquires Bukit Raja industrial complex for RM49mil

Axis REIT Managers Bhd chief executive officer/executive director Leong Kit May

PETALING JAYA: Axis Real Estate Investment Trust’s (Axis-REIT) trustee, RHB Trustees Bhd has entered into a sale and purchase agreement to acquire an industrial complex, from Amsteel Mills Sdn. Bhd. (AMSB) for a cash consideration of RM49mil.

In a statement, Axis-REIT said AMSB will lease back the industrial complex for a period of six years at the starting rental of RM285,833.33 per month.

The industrial complex is currently wholly and fully occupied by AMSB, involved in the manufacturing and marketing of steel bars and wire rods.

The industrial complex, built upon a leasehold land measuring approximately 347,491 sq ft has a net lettable area of 199,500 sq ft. It is located in the well-established Bukit Raja industrial area.

Axis-REIT said the purchase price was based on the market value of RM50mil, as appraised by independent registered valuer, Savills (Malaysia) Sdn Bhd, in its valuation report dated Feb 22.

The acquisition will be funded by existing bank financing, which will increase Axis-REIT’s financing ratio to 37.05% of the audited assets as at Dec 31, 2022. This is still below the gearing limit of 50%, as prescribed by the Guidelines on Listed Real Estate Investment Trusts issued by Securities Commission Malaysia.

“We are pleased with this acquisition as it adds on to the 3 existing properties that we have already owned in Bukit Raja, a prominent industrial area that is well connected with various major highways.

“This property is also adjoining Axis-REIT’s existing property, Axis Facility 2 @ Bukit Raja. We are confident this acquisition will contribute positively to Axis-REIT’s earnings once the acquisition is completed, which is targeted to be by the third quarter of 2024,” Axis REIT Managers Bhd chief executive officer/executive director Leong Kit May said.