PETALING JAYA (Oct 8): AllianceDBS Research Sdn Bhd has downgraded Axis Real Estate Investment Trust (Axis REIT) shares to "hold" from "buy" after its share price exceeded the research firm's estimates.

In a note today, AllianceDBS said it had maintained its target price for Axis REIT shares at RM3.60. As of 10.22am, Axis REIT shares were traded at RM3.63, down one sen or 0.27%.

“Since our last report, Axis REIT’s share price has run-up past our target price (TP)

“Although we will be reviewing our earnings estimates and TP in an update report soon, we believe positives are largely priced in,” AllianceDBS said.

AllianceDBS' review of Axis REIT shares came on the heels of Axis-REIT’s announcement it was acquiring a freehold industrial facility within Kawasan Perindustrian SiLC, Johor Baru, for RM153.5 million cash.

Axis-REIT has signed a sale and purchase agreement with Yongnam Engineering Sdn Bhd (YESB) for the proposed acquisition and leaseback of the property.

AllianceDBS said the purchase was “sizeable” for Axis REIT, at 9.7% of the company’s total asset value. AllianceDBS said the acquisition would provide a solid income stream to Axis REIT.

"The purchase will be funded by borrowings. Gearing should remain manageable at 30%-40%, especially with plans to place out about 84m shares to raise RM280m to support a stream of acquisitions," AllianceDBS said.