PETALING JAYA: Axis Real Estate Investment Trust
(Axis-REIT) is expected to see a gradual earnings recovery from the fourth quarter of 2026, supported by committed lease-ups and income from recently completed acquisitions.
These are based on RHB Research’s forecasts and the outlook follows a weaker nine months ended September 2026 (9M26) which missed forecasts.
RHB Research said core earnings fell 6.3% year-on-year to RM144.5mil, accounting for 69% of its full-year forecast and 66% of consensus estimates.
“Axis-REIT’s 9M26 results missed expectations, largely due to a slower-than-anticipated recovery in portfolio occupancy,” it said. Portfolio occupancy stood at 93%, down from 97% in the second quarter of 2025 (2Q25).
RHB Research said revenue declined 1% to RM270.1mil, partly due to lease expiries at industrial properties and suspended rental income at Wisma Kemajuan following a fire in February.
“Encouragingly, Bukit Raja Distribution Centre achieved its targeted 77% occupancy in 3Q26 and is expected to reach 91% by January 2027, while Axis Shah Alam Distribution Centre 3 attained full occupancy ahead of schedule,” it said.
However, new vacancies at Axis Shah Alam Distribution Centre 5 and Senawang Industrial Facility delayed a broader rental recovery.
“The two fully occupied properties acquired for RM166mil in August-September should contribute a full quarter of rental income from 4Q26,” RHB Research said.
“Axis also has RM289mil of ongoing acquisitions, largely pre-leased and targeted for completion between 4Q26 and 2027, providing further earnings visibility,” it added.
RHB Research maintained its “buy” call on the counter but cut its target price to RM2.30 per unit from RM2.44 after lowering its earnings forecasts for 2026 to 2028.
Meanwhile, CIMB Research also noted Axis-REIT’s 9M26 results fell below expectations as new vacancies offset gains at properties where new tenants had been secured. It put core net profit at RM144.4mil, or 70% of its full-year forecast.
“Portfolio occupancy was flat quarter-on-quarter at 93%, as gains at Bukit Raja DC (77% occupancy) and Axis Shah Alam DC 3 (100%) were offset by lease expiries at Axis Shah Alam DC 5 and Senawang Industrial Facility,” it said.
CIMB Research said the two acquisitions completed in the third quarter were expected to add about RM10.5mil in annual gross rental income. “We expect a full-quarter gross rental contribution of RM2.6mil from 4Q26,” it said.
The research house maintained its “buy” call on the REIT while reducing its target price to RM2.10 from RM2.15 per unit.
“We remain positive on the REIT, supported by its active acquisition and development pipeline, which should drive medium-term earnings growth,” CIMB Research said. It cautioned that slower occupancy recovery, weaker rental increases and acquisition delays remained risks to its outlook.
CIMB Research said a new tenant had been secured for Axis Shah Alam Distribution Centre 5, with occupancy expected to reach 82% in the fourth quarter, while marketing for Senawang Industrial Facility continued.
“Notably, our FY27-FY28 forecasts have yet to incorporate the four ongoing acquisitions, presenting potential upside to earnings,” it said.
The research house said the debt-funded acquisitions had lifted Axis-REIT’s financing ratio to 35.1% at end-September from 33.3% at end-June. “The stock continues to offer attractive forecast FY26-FY27 dividend yields of 5.6% to 5.9%,” it added.
