KUALA LUMPUR (Dec 5): Axis Real Estate Investment Trust (Axis-REIT) has added its 40th property — an industrial facility in Gebeng, Kuantan — to its portfolio today.

The property comprises two contiguous parcels of land with buildings which are used for pipe coating related industrial activities, said Axis-REIT’s manager, Axis REIT Managers Bhd (ARMB).

This latest acquisition will increase the total assets under management of the trust to RM2.46 billion, ARMB said in a statement today.

The leaseback of the property to Wasco Coatings Malaysia Sdn Bhd is for an initial fixed period of 15 years with an option to renew for another five years, it added.

The acquisition has a starting net yield of 7% before Islamic financing cost, while the agreed lease rental of the property has a step up of 10% every three years.

According to AMRB, one parcel of land was fully paid today at the purchase price of RM120 million, with the lease of the property commencing accordingly as specified in the terms and conditions of the sales and purchase agreement.

The balance purchase price of the second parcel, at RM35 million, will be paid at a later stage once the completion requirement is fulfilled in accordance to the agreement.

“We are pleased that we have completed our 40th acquisition before the year end and merely a week after the completion of our private placement. The acquisition will contribute positively to the earnings of the Trust for 2017,” said Leong Kit May, ARMB’s chief executive officer and executive director.