KUALA LUMPUR (July 24): Axis Real Estate Investment Trust (REIT) is planning to buy one piece of leasehold land and a portion of another leasehold land in Pahang, measuring a total of 126.55 acres for RM155 million in cash.

In a filing to Bursa Malaysia today, Axis REIT said the acquisition of the lands will be together with buildings and structures erected thereon, situated within Kawasan Perindustrian MIEL, Gebeng, Kuantan, Pahang, from five vendors, which are Wah Seong Corp Bhd's subsidiaries.

The five vendors are Wasco Resources Sdn Bhd, Wasco Coatings Services Sdn Bhd, Wasco Coatings Insulation Sdn Bhd, Wasco Lindung Sdn Bhd and Wasco Coatings Malaysia Sdn Bhd.

"The proposed acquisition of the property is in line with the manager's investment objectives and the growth strategy of Axis REIT to provide the unitholders with stable income distribution and to achieve growth in the net asset value (NAV) per unit of Axis REIT, by acquiring high quality, earnings accretive property with strong recurring rental income," said Axis REIT.

Furthermore, Axis REIT said the proposed acquisition would enable it to diversify and enlarge its portfolio of properties and is expected to benefit Axis REIT in the long term as a result of economies of scale.

Given the location of the property and the long tenure of the lease, the proposed acquisition will be accretive to its distributable income, said Axis REIT.

Axis REIT said the proposed acquisition will be funded by existing and new bank borrowings of the company.

The proposed acquisition is expected to be completed by the end of 2017, while the leaseback of the property to the lessee will commence on completion date, said Axis REIT.

At noon break, shares in Axis REIT were still untraded. They closed unchanged at RM1.64 last Friday for a market capitalisation of RM1.81 billion.

Meanwhile, Wah Seong shares were up four sen or 4.4% at 95 sen with 1.24 million shares traded, giving it a market capitalisation of RM730.3 million.