Thursday 28 Mar 2024
By
main news image

PETALING JAYA (April 29): Axis Real Estate Investment Trust's (REIT) objective to raise its asset size to RM3 billion might take the industrial property REIT to East Malaysia for the first time, given the prospects of improving economy in the region and efforts to upgrade the infrastructure there.

Axis REIT chief executive officer Leong Kit May, who replaced Datuk Stewart LaBrooy last October, also acknowledged that with Lazada Malaysia opening a warehouse in Sarawak, there are opportunities to be captured in e-commerce industrial properties in East Malaysia.

She had previously said the trust's focus this year is on acquiring industrial assets and the e-commerce industry.

"With Pan Borneo Highway coming up and the infrastructure improving in East Malaysia, the industrial properties there seem to be more attractive now," Leong said after Axis REIT's annual general meeting today.

"We are constantly monitoring prospective acquisitions in the whole of Malaysia. Sixty percent of our assets are in Selangor, while 30% are in Johor; it would be good to expand our geographic spread, provided the assets can bring good yields," she explained.

As at March 31, Axis REIT owned 38 properties, and its total assets were valued at RM2.16 billion. The trust has plans to increase its asset size to RM3 billion although Leong said it would not like to have a deadline to meet the objective.

Axis REIT, being one of the most active REITs in buying and selling properties to rejuvenate its portfolio, just completed acquisitions of four properties in Iskandar Malaysia, Johor. These are campus blocks at Beyonics Technology Ltd's iPark industrial city.

Leong said Axis REIT will finalise the purchase of two more industrial properties by the third quarter of this year — one also in Johor and another in Selangor. It might also add one or two more properties into its portfolio after that.

Axis REIT will have to raise funds to purchase the properties as its total borrowings of RM744.78 million were already at 34.5% of its asset size. Leong said shareholders approved a resolution to place out up to 19.9% of the current unit base, and the trust will do so in stages beginning in the second quarter.

"We aim to lower our gearing to 28% (of total asset value) before we begin acquiring, and that gives us more room to gear up again," he added.

Axis REIT has one 50-acre industrial property in Klang, which is a short drive away from the Kesas Highway, currently without tenant. Called the Axis Pre-Delivery & Inspection Centre, the trust has plans to refurbish it into a major distribution centre for e-commerce establishments.

Leong said for now, it is discussing with authorities on how to go about with the enhancement initiatives.

Malaysian REITs are not allowed to develop their own properties. Last year, the Monetary Authority of Singapore increased the republic's REITs allowance to develop properties to 25% of deposited properties from 10% previously.

 

      Print
      Text Size
      Share