Friday 29 Mar 2024
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KUALA LUMPUR (Oct 23): Axis Real Estate Investment Trust (REIT) announced a net property income (NPI) of RM35.92 million for its third quarter ended Sept 30, 2017 (3QFY17), up a marginal 0.33% from RM35.8 million a year ago, thanks to rental proceeds from newly acquired Scomi Facility @ Rawang and Kerry Warehouse.

The better earnings was also due to positive rental revision and the rental of 17.6 acres of land at Axis PDI Centre.

In its quarterly financial report to Bursa Malaysia, Axis REIT said these had offset the short-term rental loss from Delfi Warehouse and D21 Logistics Warehouse (formerly known as BMW Centre PTP), and from the loss of contribution from Axis Eureka, which has been sold.

Axis REIT also noted that new tenants have been secured for both Delfi Warehouse and D21 Logistics Warehouse. The trust's revenue growth for 3QFY17 was also flat at about RM42 million, versus RM41.98 million a year ago.

The REIT declared a 2 sen distribution per unit (DPU) to unitholder for the quarter under review, payable on Dec 13. Unitholders can choose to reinvest a quarter or half of that into new units in the REIT, with issue price of such units fixed at RM1.49 each.

Cumulatively, Axis REIT's nine months ended Sept 30 this year (9MFY17) recorded an NPI of RM109.53 million, up 2.11% from RM107.27 million in previous corresponding period, as revenue inched up 1.08% to RM126.33 million from RM124.97 million.

Moving forward, Axis REIT said the office market is expected to continue to remain challenging for the rest of 2017 with new supply continuing to outstrip demand.

However, with the increasing demand from the logistics and manufacturing sectors, the industrial market is expected to remain positive.

"We are pleased to report that the development of Nestle Distribution Centre is on schedule and upon completion will increase the portfolio size by 515,000 sq ft of space by early 2018. This additional space will start contributing to the fund by June 2018," Axis REIT said.

"Vacancy in the portfolio currently stands at 753,404 sq ft. We are in advanced stages to conclude new tenants for some of these spaces. The manager's focus in 2017 is to fill the voids and tenants retention. By filling the current vacant spaces, we expect to add as much as 1.72 sen to the annual DPU," it added.

As at 3QFY17, Axis REIT's portfolio occupancy rate stands at 90.1% with a weighted average lease expiry period of 4.51 years based on rental.

Axis REIT also said its current total estimated value of acquisition targets stands at RM228.5 million, and said that its manager, Axis REIT Managers Bhd, will continue to source and evaluate potential acquisition targets that are deemed investable.

"The selection of properties will continue to focus on grade A logistics facilities and manufacturing facilities with long leases from tenants with strong covenants; well-located retail warehousing in locations ideal for last-mile distribution; and office, business parks and industrial properties with potential for future enhancement," it said.

Axis REIT's unit price gained two sen or 1.27% to close at RM1.59 today, valuing the trust at RM1.76 billion.

 

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