PETALING JAYA: Axis Real Estate Investment Trust
(Axis-REIT) is likely to be a proxy for the industrial segment amid a growing demand for industrial properties.
In a report, Kenanga Investment Bank Bhd said the trusts had secured two tenants for the Seberang Prai Logistics Warehouse 2 and Bukit Raja Distribution Centre, with tenancy commencing in March this year.
According to the research house, the recent sizeable proposed acquisition of an industrial plot of land with built assets at Seberang Prai Tengah for RM800mil is expected to generate positive cash flows for the group from the second quarter of 2027.
“The group remains optimistic on the industrial sector outlook and remains confident to see continuous positive rental reversions in the year ahead,” it noted.
In addition, Axis-REIT did not report any difficulty in securing the 8% sales and service tax on rentals for the second half of 2025.
“The group continues to see a healthy volume of leasing enquiries, with strong interest from both local and foreign companies.
“Leasing momentum remained strong, with 11% of vacated space re-tenanted within the year at rental rates 15% above previous contracts,” the research house said.
The REIT’s earnings met expectations, coming in at 95% and 97% of the research house’s full-year forecast and consensus full-year estimate, respectively.
“It declared a gross distribution of 2.75 sen per unit, bringing the year-to-date total to 10.55 sen, which met our full-year dividend forecast of 10.5 sen.”
The research house added that it has maintained its “market perform” call on the stock, with a higher target price of RM2.02 from RM1.96, based on financial year 2026 (FY26) net distribution of 10.1 sen against an unchanged target yield of 5%.
Meanwhile, CGS International Securities Malaysia Sdn Bhd expects the REIT’s portfolio occupancy rate to remain stable in FY26 and believes it achieved its targeted FY25 average rental reversion of more than 5%.
The research house also noted that the acquisition of an industrial property in Port Klang for RM50mil is expected to contribute positively to earnings in the first quarter of 2026 (1Q26).
“With three other ongoing acquisitions, gearing is manageable at 0.32 times as at end-4Q25.
“However, we project gearing to rise to 0.43 times post completion of all ongoing acquisitions,” it said.
As such, the research firm reiterated its “add” call on the REIT, with a target price of RM2.29.
“We remain optimistic on Axis-REIT’s FY26 to FY28 outlook, premised on active acquisitions and strategic asset expansion, and further upside potential from its active acquisition pipeline.”
It added that re-rating catalysts include the acquisition of new assets and higher rental reversions. while downside risks include non-renewal of existing leases and higher operating expenses.
