PETALING JAYA: Axis Real Estate Investment Trust
’s (Axis-REIT) proposal to acquire an industrial property in Seberang Perai, Penang, is a positive development, says CGS International Research.
Axis-REIT’s proposed acquisition involves buying a 135.5 acre industrial property for RM800mil from Ann Joo Steel Bhd and then renting it back to the latter for eight years with an agreed initial monthly rent of RM4.16mil.
Notably, this is the largest-ever acquisition in Axis-REIT’s corporate history in terms of transaction value.
“We are positive on the acquisition as it signals accelerating inorganic growth and aligns with the REIT’s strategy of scaling high-quality industrial assets with long-term tenant income security, supporting incremental distribution per unit (DPU) accretion and in net asset value (NAV) per unit.”
According to the research house, the property’s strategic location will also reinforce Axis-REIT’s appeal for logistics and manufacturing tenants within the northern industrial corridor in Malaysia.
It added that this was the REIT’s third acquisition year-to-date, lifting total acquisition value for this year (FY25) to RM930mil, compared with RM719mil across eight deals last year.
“Based on the fixed monthly rental of RM4.16mil, we estimate the asset will contribute about RM44mil a year in incremental net property income (NPI), equivalent to 14% of our FY26 NPI forecast.”
However, the research house noted that the implied NPI yield of 5.6% is slightly below Axis-REIT’s FY26 portfolio yield of 6.1%
It reiterated its “add” call on the REIT with an unchanged target price of RM2.29, pending further clarity on the acquisition, which is expected to be completed by the first quarter of FY26.
