PETALING JAYA: Axis Real Estate Investment Trust
(Axis-REIT), which owns office and industrial assets, is expected to maintain earnings momentum from recent acquisitions as well as full-year contributions from newly secured leases and continued portfolio optimisation.
It reported first quarter ended March 31, 2025 (1Q25) results that were largely in line with market expectations, with analysts noting the earnings boost in the quarter under review from higher rental collections from newly acquired properties.
Analysts also noted that the Axis-REIT has raised its target acquisition of properties to RM430mil from RM300mil previously for the financial year ending Dec 31, 2025 (FY25).
Maybank Investment Bank Research, which has maintained a “buy” call on the stock with an unchanged target price of RM2.01, said it remains well-positioned to benefit from sustained demand for logistics and industrial space, despite macro-economic uncertainties.
The research house said its pipeline of potential acquisitions provided visible growth catalysts, including newly secured leases’ full contribution and portfolio optimisation.
CIMB Securities Research, which maintained a “buy” call with an unchanged target price of RM2.13, expects the enlarged portfolio of properties to support 8.4% year-on-year (y-o-y) growth in earnings for FY25 despite flattish quarter-on-quarter earnings growth.
Besides a strategy targeting well-located Grade A logistics and manufacturing facilities, secured by long-term leases with tenants of strong credit profiles, it said Axis- REIT remains open to opportunities in offices, business parks, and industrial assets.
“The potential increase in electricity tariff from July 1, is expected to have a minimal impact on earnings as 74% of Axis-REIT properties are single-tenanted,” it added.
HLIB Research anticipated sustained earnings growth in FY25 and has retained a “buy” call with a higher target price RM2.06 from RM1.92.
The growth would come primarily from full-year contribution from acquisitions in the prior year. It noted that the supply-chain diversification trend among multinational firms could be a dynamic that favours industrial property-focused REITs.
It added that Axis-REIT’s completion of an RM449.7mil private placement from October 2024 has also lowered gearing to 33% in 1Q25 from 38% in 3Q24, which strengthened its balance sheet and enhanced capacity to pursue future acquisitions.
Kenanga Research said the current gearing ratio provided Axis-REIT with some RM900mil in additional funding for future acquisitions.
The research house has maintained a “market perform” call on the stock with an unchanged target price of RM1.86.
